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Lamar Advertising Slashes Q2 Dividend on Coronavirus Scare
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Lamar Advertising Company (LAMR - Free Report) has announced a quarterly dividend of 50 cents per share, reflecting a reduction from its earlier payment of $1 per share on Mar 31, 2020. This dividend will be payable on Jun 30, to shareholders of record as of Jun 22, 2020.
Per management, the company witnessed an upswing in the customer activity in the first quarter but the business environment remains uncertain for the remainder of the year. Taking this into account, the company had previously noted that its plan to pay quarterly distributions in an aggregate amount of $4 per share in 2020 needs to be evaluated quarterly. This is because efforts to contain the spread of coronavirus are hurting the broader economy, forcing many businesses to curtail their advertising expenses, with customers staying at homes most of the time.
The company slashed the dividend in a bid to fortify its liquidity position and strengthen the balance sheet.
Due to the coronavirus pandemic and the resultant macroeconomic uncertainty, the company has withdrawn the 2020 guidance, and informed about the board’s re-evaluation of the dividend policy and detailed liquidity measures.
Consequently, the company made use of its $750-million revolving credit facility and drew down $535 million from it in March, giving it liquidity and financial headroom, in order to address the liquidity situation.
At the end of first-quarter 2020, Lamar Advertising had total liquidity of $608.5 million, of which $111.9 million was available for borrowing under its revolving senior credit facility, and $496.6 million in cash and cash equivalents. It has no scheduled amortization in 2020 and its next maturity is in 2021.
With a national footprint and diversified tenant base, Lamar is in a strong footing to sail through these uncertain times. However, the adverse impact of the pandemic on the company’s operating environment remains a concern. The reduction in dividend also acts as a deterrent for shareholders.
Alexander & Baldwin, Inc.’s (ALEX - Free Report) funds from operations (FFO) per share estimate for 2020 moved up from 22 cents to 83 cents over the past month. The stock currently sports a Zacks Rank of 1.
City Office REIT, Inc.’s (CIO - Free Report) Zacks Consensus Estimate for the ongoing-year FFO per share moved 13.3% north to $1.11 over the past month. The stock currently flaunts a Zacks Rank of 1.
One Liberty Properties, Inc.’s (OLP - Free Report) Zacks Consensus Estimate for the current year’s FFO per share moved 2.2% north to $1.89 over the past two months. The stock currently sports a Zacks Rank of 1.
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.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Lamar Advertising Slashes Q2 Dividend on Coronavirus Scare
Lamar Advertising Company (LAMR - Free Report) has announced a quarterly dividend of 50 cents per share, reflecting a reduction from its earlier payment of $1 per share on Mar 31, 2020. This dividend will be payable on Jun 30, to shareholders of record as of Jun 22, 2020.
Per management, the company witnessed an upswing in the customer activity in the first quarter but the business environment remains uncertain for the remainder of the year. Taking this into account, the company had previously noted that its plan to pay quarterly distributions in an aggregate amount of $4 per share in 2020 needs to be evaluated quarterly. This is because efforts to contain the spread of coronavirus are hurting the broader economy, forcing many businesses to curtail their advertising expenses, with customers staying at homes most of the time.
The company slashed the dividend in a bid to fortify its liquidity position and strengthen the balance sheet.
Due to the coronavirus pandemic and the resultant macroeconomic uncertainty, the company has withdrawn the 2020 guidance, and informed about the board’s re-evaluation of the dividend policy and detailed liquidity measures.
Consequently, the company made use of its $750-million revolving credit facility and drew down $535 million from it in March, giving it liquidity and financial headroom, in order to address the liquidity situation.
At the end of first-quarter 2020, Lamar Advertising had total liquidity of $608.5 million, of which $111.9 million was available for borrowing under its revolving senior credit facility, and $496.6 million in cash and cash equivalents. It has no scheduled amortization in 2020 and its next maturity is in 2021.
With a national footprint and diversified tenant base, Lamar is in a strong footing to sail through these uncertain times. However, the adverse impact of the pandemic on the company’s operating environment remains a concern. The reduction in dividend also acts as a deterrent for shareholders.
Shares of Lamar Advertising, a Zacks Rank #3 (Hold) company, have depreciated 23.3% so far this year, while its industry has declined 9.5%. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Stocks to Consider
Alexander & Baldwin, Inc.’s (ALEX - Free Report) funds from operations (FFO) per share estimate for 2020 moved up from 22 cents to 83 cents over the past month. The stock currently sports a Zacks Rank of 1.
City Office REIT, Inc.’s (CIO - Free Report) Zacks Consensus Estimate for the ongoing-year FFO per share moved 13.3% north to $1.11 over the past month. The stock currently flaunts a Zacks Rank of 1.
One Liberty Properties, Inc.’s (OLP - Free Report) Zacks Consensus Estimate for the current year’s FFO per share moved 2.2% north to $1.89 over the past two months. The stock currently sports a Zacks Rank of 1.
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.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>