Critical Comparison: Lamar Advertising (NASDAQ:LAMR) vs. Highwoods Properties (NYSE:HIW)

Lamar Advertising (NASDAQ:LAMR) and Highwoods Properties (NYSE:HIW) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Lamar Advertising and Highwoods Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamar Advertising	0	4	1	0	2.20
Highwoods Properties	1	4	3	0	2.25

Lamar Advertising presently has a consensus target price of $133.00, suggesting a potential upside of 3.66%. Highwoods Properties has a consensus target price of $30.75, suggesting a potential upside of 19.02%. Given Highwoods Properties’ stronger consensus rating and higher probable upside, analysts clearly believe Highwoods Properties is more favorable than Lamar Advertising.

Dividends

Lamar Advertising pays an annual dividend of $6.20 per share and has a dividend yield of 4.8%. Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 7.7%. Lamar Advertising pays out 145.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Highwoods Properties pays out 170.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lamar Advertising has increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

93.8% of Lamar Advertising shares are held by institutional investors. Comparatively, 96.3% of Highwoods Properties shares are held by institutional investors. 15.0% of Lamar Advertising shares are held by company insiders. Comparatively, 1.9% of Highwoods Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Lamar Advertising and Highwoods Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lamar Advertising	19.27%	43.02%	6.51%
Highwoods Properties	15.98%	5.48%	2.13%

Earnings & Valuation

This table compares Lamar Advertising and Highwoods Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamar Advertising	$2.21 billion	5.89	$361.87 million	$4.26	30.12
Highwoods Properties	$825.86 million	3.44	$102.25 million	$1.17	22.08

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

Volatility and Risk

Lamar Advertising has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Highwoods Properties has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Summary

Lamar Advertising beats Highwoods Properties on 12 of the 17 factors compared between the two stocks.

About Lamar Advertising

Lamar Advertising Company operates as an outdoor advertising company in the United States and Canada. The company owns and operates billboards, logo signs, and transit advertising displays, as well as rents space for advertising on billboards, buses, shelters, benches, logo plates, and in airport terminals. Lamar Advertising Company was founded in 1902 and is headquartered in Baton Rouge, Louisiana.

About Highwoods Properties

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (REIT) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Highwoods is in the work-placemaking business. We believe that by creating environments and experiences where the best and brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in turn, our stakeholders.