Lamar Advertising (NASDAQ: LAMR) and W.P. Carey (NYSE:WPC) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitabiliy, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Lamar Advertising and W.P. Carey, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lamar Advertising 0 1 2 0 2.67
W.P. Carey 1 2 1 0 2.00

Lamar Advertising presently has a consensus target price of $79.67, indicating a potential upside of 10.25%. W.P. Carey has a consensus target price of $67.67, indicating a potential downside of 0.49%. Given Lamar Advertising’s stronger consensus rating and higher probable upside, research analysts plainly believe Lamar Advertising is more favorable than W.P. Carey.

Valuation & Earnings

This table compares Lamar Advertising and W.P. Carey’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lamar Advertising $1.51 billion 4.00 $627.77 million $2.94 24.58
W.P. Carey $884.11 million 8.19 $715.85 million $2.48 27.42

W.P. Carey has higher revenue, but lower earnings than Lamar Advertising. Lamar Advertising is trading at a lower price-to-earnings ratio than W.P. Carey, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lamar Advertising and W.P. Carey’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lamar Advertising 19.18% 27.42% 7.40%
W.P. Carey 33.03% 7.73% 3.17%

Insider & Institutional Ownership

85.6% of Lamar Advertising shares are held by institutional investors. Comparatively, 49.3% of W.P. Carey shares are held by institutional investors. 18.7% of Lamar Advertising shares are held by company insiders. Comparatively, 1.7% of W.P. Carey shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Lamar Advertising pays an annual dividend of $3.32 per share and has a dividend yield of 4.6%. W.P. Carey pays an annual dividend of $4.00 per share and has a dividend yield of 5.9%. Lamar Advertising pays out 112.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.P. Carey pays out 161.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.P. Carey has raised its dividend for 16 consecutive years. W.P. Carey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Lamar Advertising has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, W.P. Carey has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Summary

Lamar Advertising beats W.P. Carey on 12 of the 17 factors compared between the two stocks.

Lamar Advertising Company Profile

Lamar Advertising Company is an outdoor advertising company in the United States. The Company operates in the advertising segment. The Company sells advertising on billboards, buses, shelters, benches and logo plates. It operates three types of outdoor advertising displays: billboards, logo signs and transit advertising displays. As of December 31, 2012, the Company owned and operated over 144,000 billboard advertising displays in 44 states, Canada and Puerto Rico, over 115,000 logo advertising displays in 22 states and the province of Ontario, Canada, and operated over 34,000 transit advertising displays in 15 states, Canada and Puerto Rico. In August 2014, the Company acquired the assets of Marco Outdoor Advertising, Inc.

W.P. Carey Company Profile

W. P. Carey provides long-term, sale-leaseback and build-to-suit transactions for companies worldwide, and manages a global investment portfolio. It has two primary business segments. Under the investment management segment, the Company earns revenue as the advisor to publicly owned, non-actively traded real estate investment trusts (REITs), which are sponsored by the Company under the Corporate Property Associates brand name (the CPA REITs) and invests in similar properties. Under the real estate ownership segment, the Company owns and invests in commercial properties in the United States and the European Union that are then leased to companies, primarily on a single-tenant, triple-net leased basis. As of December 31, 2009, it operated as advisor to Corporate Property Associates 14 Incorporated, Corporate Property Associates 15 Incorporated, Corporate Property Associates 16 – Global Incorporated and Corporate Property Associates 17 – Global Incorporated.

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