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Is it Wise to Retain Lamar Advertising Stock in Your Portfolio Now?
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Key Takeaways
Lamar benefits from steady local sales, digital billboard expansion, and a broad advertiser base.
LAMR completed 10 acquisitions in Q1 2025 and raised its dividend nine times over five years.
High debt, national ad softness and intense media competition weigh on LAMR's growth outlook.
Lamar Advertising Company’s (LAMR - Free Report) impressive footprint of outdoor advertising assets across the United States and Canada positions it well to ride the growth curve. Its diversified tenant base, opportunistic acquisitions and efforts to upgrade its portfolio are key upsides.
However, a slowdown in national ad spend and competition from other outdoor advertisers and other forms of media are major concerns for Lamar. The high debt burden acts as a deterrent for the company.
Last month, along with the dividend payout, the company announced that its board of directors has approved an increase of $150 million to the stock repurchase program, bringing the total amount available to be repurchased to $250 million.
Shares of this Zacks Rank #3 (Hold) company have risen 1.4% over the past month, outperforming the industry’s upside of 0.7%. Analysts seem bullish on this stock, with the Zacks Consensus Estimate for its 2025 FFO being revised northward by 1.2% over the past month.
Image Source: Zacks Investment Research
What Is Aiding Lamar?
Lamar enjoys an impressive national footprint and holds a leading position as a provider of logo signs in the United States. The company enjoys a diversified tenant base comprising tenants from the services, health care, restaurants, retailers, automotive, insurance and gaming categories. This aids in stable revenue generation. In the first quarter of 2025, local and regional sales accounted for 82% of the company’s billboard revenues. Moreover, local and regional sales reported growth for the 16th consecutive quarter.
Over the recent years, Lamar has made efforts to upgrade its portfolio, increasing occupancy in its existing advertising displays and enabling it to enjoy a significant market share in the U.S. outdoor advertising business. The company has added a large number of digital screens through acquisitions and internal conversions over the past several years. It offers customers the largest network of digital billboards in the United States, with around 5,100 displays as of the end of the first quarter of 2025.
Out-of-home (OOH) advertising has been growing at a rapid pace and continues to increase its market share in comparison with other forms of media. In the upcoming years, higher technology investments are expected to provide further support to OOH advertising. Therefore, the company’s expansion activities over the recent years bode well for long-term growth. In the first quarter of 2025, Lamar completed 10 acquisitions worth $22.1 million.
Solid dividend payouts remain the biggest attraction for REIT investors, and Lamar remains committed to the same. In the past five years, the company has raised its dividend nine times. Its five-year annualized dividend growth rate is 24.17%, which is encouraging.
Moreover, LAMR’s share repurchases also demonstrate its commitment to driving shareholder value. Since the beginning of 2025 through April, the company repurchased common stock, adding to $150 million, with $100 million remaining under the Stock Repurchase Program. On May 15, 2025, Lamar’s board of directors approved an additional amount of $150 million, bringing the total amount remaining to be repurchased to $250 million under the program. Such efforts raise investors’ confidence and optimism about the stock.
What Is Hurting LAMR?
LAMR faces competition from other outdoor advertisers for customers, display locations and structures. The company also competes with other forms of media, such as television, radio, print media, direct mail marketers and online, mobile & social media platforms. Despite a significant portion of the company’s revenues coming from local businesses, we believe this competition from national players may partly impede its growth momentum.
Local and regional sales grew for the 16th consecutive quarter. However, the choppiness in the company’s national business continues to be a headwind for its overall revenue growth.
Despite the Federal Reserve announcing rate cuts late in 2024, the interest rate is still high and is a concern for Lamar Advertising. The company has a substantial debt burden, and its total debt as of March 31, 2025 was approximately $3.19 billion.
The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share has been raised marginally over the past two months to $2.34.
The consensus estimate for W.P. Carey’s current-year FFO per share has moved marginally northward in the past month to $4.88.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Is it Wise to Retain Lamar Advertising Stock in Your Portfolio Now?
Key Takeaways
Lamar Advertising Company’s (LAMR - Free Report) impressive footprint of outdoor advertising assets across the United States and Canada positions it well to ride the growth curve. Its diversified tenant base, opportunistic acquisitions and efforts to upgrade its portfolio are key upsides.
However, a slowdown in national ad spend and competition from other outdoor advertisers and other forms of media are major concerns for Lamar. The high debt burden acts as a deterrent for the company.
Last month, along with the dividend payout, the company announced that its board of directors has approved an increase of $150 million to the stock repurchase program, bringing the total amount available to be repurchased to $250 million.
Shares of this Zacks Rank #3 (Hold) company have risen 1.4% over the past month, outperforming the industry’s upside of 0.7%. Analysts seem bullish on this stock, with the Zacks Consensus Estimate for its 2025 FFO being revised northward by 1.2% over the past month.
Image Source: Zacks Investment Research
What Is Aiding Lamar?
Lamar enjoys an impressive national footprint and holds a leading position as a provider of logo signs in the United States. The company enjoys a diversified tenant base comprising tenants from the services, health care, restaurants, retailers, automotive, insurance and gaming categories. This aids in stable revenue generation. In the first quarter of 2025, local and regional sales accounted for 82% of the company’s billboard revenues. Moreover, local and regional sales reported growth for the 16th consecutive quarter.
Over the recent years, Lamar has made efforts to upgrade its portfolio, increasing occupancy in its existing advertising displays and enabling it to enjoy a significant market share in the U.S. outdoor advertising business. The company has added a large number of digital screens through acquisitions and internal conversions over the past several years. It offers customers the largest network of digital billboards in the United States, with around 5,100 displays as of the end of the first quarter of 2025.
Out-of-home (OOH) advertising has been growing at a rapid pace and continues to increase its market share in comparison with other forms of media. In the upcoming years, higher technology investments are expected to provide further support to OOH advertising. Therefore, the company’s expansion activities over the recent years bode well for long-term growth. In the first quarter of 2025, Lamar completed 10 acquisitions worth $22.1 million.
Solid dividend payouts remain the biggest attraction for REIT investors, and Lamar remains committed to the same. In the past five years, the company has raised its dividend nine times. Its five-year annualized dividend growth rate is 24.17%, which is encouraging.
Moreover, LAMR’s share repurchases also demonstrate its commitment to driving shareholder value. Since the beginning of 2025 through April, the company repurchased common stock, adding to $150 million, with $100 million remaining under the Stock Repurchase Program. On May 15, 2025, Lamar’s board of directors approved an additional amount of $150 million, bringing the total amount remaining to be repurchased to $250 million under the program. Such efforts raise investors’ confidence and optimism about the stock.
What Is Hurting LAMR?
LAMR faces competition from other outdoor advertisers for customers, display locations and structures. The company also competes with other forms of media, such as television, radio, print media, direct mail marketers and online, mobile & social media platforms. Despite a significant portion of the company’s revenues coming from local businesses, we believe this competition from national players may partly impede its growth momentum.
Local and regional sales grew for the 16th consecutive quarter. However, the choppiness in the company’s national business continues to be a headwind for its overall revenue growth.
Despite the Federal Reserve announcing rate cuts late in 2024, the interest rate is still high and is a concern for Lamar Advertising. The company has a substantial debt burden, and its total debt as of March 31, 2025 was approximately $3.19 billion.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are VICI Properties (VICI - Free Report) and W.P. Carey (WPC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share has been raised marginally over the past two months to $2.34.
The consensus estimate for W.P. Carey’s current-year FFO per share has moved marginally northward in the past month to $4.88.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.