Here's What Makes Lamar (LAMR) a Promising Investment Bet

Adding shares of Lamar Advertising Company LAMR to your portfolio now might be a wise decision, given the company’s impressive national footprint and leading position as a provider of logo signs in the United States. It is one of the largest owners and operators of outdoor advertising structures in the nation.

Additionally, strategic measures such as portfolio upgradation and expansion will likely enable the company to increase occupancy and raise advertising rates at its advertising displays.

Moreover, the company's price performance seems impressive. This Zacks Rank #2 (Buy) stock has rallied 10.7%, as against the industry’s decline of 2.3% over the past three months.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Why the Stock is an Attractive Choice

Superior return on equity (ROE): Lamar has a ROE of 32.10%, significantly higher than the industry’s average of 4.54%. This highlights optimal utilization of equity and boosts investor confidence in the stock.

Strong cash flow per share: The company generates cash flow per share of $5.38 as compared with the industry’s average of $2.26. Moreover, growth in the company’s local and national advertising revenues makes us optimistic about its operating performance in the upcoming period.

Impressive balance sheet: The company has a robust balance-sheet and decent liquidity position to pursue growth opportunities. In fact, as of Sep 30, 2019, it had $345.4 million of liquidity, comprising $322.1 million available for borrowing under its revolving senior credit facility, and $23.3 million of cash and cash equivalents. In addition, its debt maturity schedule is well laddered, with no maturities until December 2021. The company’s sound financial health will enable it to boost operational efficiency and drive long-term growth.

Portfolio upgradation and expansion to drive growth: Leveraging on the secular tailwinds in the outdoor advertising industry, Lamar is acquiring outdoor advertising assets and is marching ahead with its digital deployments. For 2019, it expects digital deployment to be around 350 units and total acquisitions to be $235-$240 million. These efforts will improve occupancy in its advertising displays and raise Lamar’s advertising rates, boosting revenue growth.

Encouraging FFO picture: The trend in estimate revision for Lamar’s 2019 funds from operations (FFO) per share indicates a favorable outlook for the company as it has witnessed a marginal upward revision to $5.81 over the past month. This suggests year-over-year growth of 5.6%.

Other Stocks to Consider

Duke Realty Corporation’s DRE FFO per share estimates for the ongoing year have been revised marginally upward to $1.44 over the past month. The stock carries a Zacks Rank of 2, at present.

Crown Castle International Corporation’s CCI Zacks Consensus Estimate for 2019 FFO per share remained unchanged at $5.97 over the past month. It currently holds a Zacks Rank of 2.

Cousins Properties Incorporated’s CUZ FFO per share estimate for the current year moved 1.4% north to $2.94 over the past month. The company also carries a Zacks Rank #2, currently.

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Crown Castle International Corporation (CCI) : Free Stock Analysis Report
 
Lamar Advertising Company (LAMR) : Free Stock Analysis Report
 
Cousins Properties Incorporated (CUZ) : Free Stock Analysis Report
 
Duke Realty Corporation (DRE) : Free Stock Analysis Report
 
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