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Here's Why You Should Add Lamar (LAMR) to Your Portfolio Now
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Lamar Advertising Company’s (LAMR - Free Report) diversified tenant base, impressive national footprint and acquisitions will likely support growth in the foreseeable future.
Specifically, Lamar boasts an impressive national footprint and holds a leading position as a provider of logos in the United States. It enjoys a diversified tenant base, comprising restaurants, services, retailers and healthcare companies. The company sources a significant part of revenues from local business, with a diversified tenant base. As a result, this source of revenues is less volatile.
Moreover, outdoor advertising is a low-cost and wide-reaching medium. This industry has scope to grow at a solid pace as consumers spend most of their time away from home. Also, fragmentation of other advertising media and technological advancements in the outdoor segment are aiding the shift to outdoor advertising.
While Lamar already holds a significant market share in the U.S. outdoor advertising business, it is now expanding the footprint to tap growth opportunities. During 2018, Lamar completed acquisitions for total price consideration of nearly $489.7 million.
However, the outdoor advertising industry is considerably regulated and acquisitions tend to be marginally profitable or require considerable subsequent investments. Resultantly, high investment expenditure for acquisitions is expected to take a toll on the company’s balance sheet.
Nevertheless, Lamar is upgrading the portfolio well and increasing occupancy in existing advertising displays and raising advertising rates. Further, the company operates in an industry that is characterized by high barriers to entry. This provides it with higher bargaining power and solid competitive edge.
Lamar also came up with a better-than-expected performance in the fourth quarter. The company reported adjusted fund from operation (FFO) per share of $1.48, which surpassed the Zacks Consensus Estimate by seven cents and was higher than the year-ago figure of $1.38. Further, net revenues of $427.9 million outpaced the Zacks Consensus Estimate of $420.6 million.
Hence, this Zacks Rank #2 (Buy) company remains well poised to capitalize on the outdoor advertising industry’s encouraging prospects and provide benefits to shareholders accordingly.
Over the past year, shares of Lamar have rallied 26.4% compared with its industry’s growth of 21.3%.
Plymouth Industrial REIT, Inc’s (PLYM - Free Report) shares have gained 31% over the past three months. Currently, the stock sports a Zacks Rank of 1.
Alexandria Real Estate Equities, Inc’s (ARE - Free Report) shares have increased 25.4% over the past three months. At present, the stock carries a Zacks Rank of 2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Here's Why You Should Add Lamar (LAMR) to Your Portfolio Now
Lamar Advertising Company’s (LAMR - Free Report) diversified tenant base, impressive national footprint and acquisitions will likely support growth in the foreseeable future.
Specifically, Lamar boasts an impressive national footprint and holds a leading position as a provider of logos in the United States. It enjoys a diversified tenant base, comprising restaurants, services, retailers and healthcare companies. The company sources a significant part of revenues from local business, with a diversified tenant base. As a result, this source of revenues is less volatile.
Moreover, outdoor advertising is a low-cost and wide-reaching medium. This industry has scope to grow at a solid pace as consumers spend most of their time away from home. Also, fragmentation of other advertising media and technological advancements in the outdoor segment are aiding the shift to outdoor advertising.
While Lamar already holds a significant market share in the U.S. outdoor advertising business, it is now expanding the footprint to tap growth opportunities. During 2018, Lamar completed acquisitions for total price consideration of nearly $489.7 million.
However, the outdoor advertising industry is considerably regulated and acquisitions tend to be marginally profitable or require considerable subsequent investments. Resultantly, high investment expenditure for acquisitions is expected to take a toll on the company’s balance sheet.
Nevertheless, Lamar is upgrading the portfolio well and increasing occupancy in existing advertising displays and raising advertising rates. Further, the company operates in an industry that is characterized by high barriers to entry. This provides it with higher bargaining power and solid competitive edge.
Lamar also came up with a better-than-expected performance in the fourth quarter. The company reported adjusted fund from operation (FFO) per share of $1.48, which surpassed the Zacks Consensus Estimate by seven cents and was higher than the year-ago figure of $1.38. Further, net revenues of $427.9 million outpaced the Zacks Consensus Estimate of $420.6 million.
Hence, this Zacks Rank #2 (Buy) company remains well poised to capitalize on the outdoor advertising industry’s encouraging prospects and provide benefits to shareholders accordingly.
Over the past year, shares of Lamar have rallied 26.4% compared with its industry’s growth of 21.3%.
Other Key Picks
Ashford Hospitality Trust, Inc’s (AHT - Free Report) shares have gained 15.9% over the past three months. At present, the stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Plymouth Industrial REIT, Inc’s (PLYM - Free Report) shares have gained 31% over the past three months. Currently, the stock sports a Zacks Rank of 1.
Alexandria Real Estate Equities, Inc’s (ARE - Free Report) shares have increased 25.4% over the past three months. At present, the stock carries a Zacks Rank of 2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>