comlb
Lieutenant
Posts: 68
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Lamar
May 20, 2022 0:15:50 GMT
Post by comlb on May 20, 2022 0:15:50 GMT
One of Josh Peters' last recommendations back in the MDI days. Lamar raised its dividend again by $0.10 to $1.20. This is after raising it from $1 to $1.10 in December. That is healthy dividend growth on a yield around 4% to begin with.
Lamar is one of the three largest billboard companies in the US (along with Clear Channel and Outdoor). The company is 100 years old and controlled by the Reilly family. Lamar focuses a bit more on suburb and rural markets than its large competitors do.
Lamar reported FFO growing and ahead of prepandemic levels, digital billboard sales grew 20%, and they raised guidance overall, board revenues grew 17%.
One of Josh's reasons for buying Lamar was the conversion of some static board into digital, where Lamar can charge higher rates. As of Dec 2016, Lamar had 2,600 digital billboards. This was only about 2% of Lamar's number of boards (112,000 total) but about 21% of Lamar's revenue ($271m from digital boards)
Fast forward to end of 2021
149,000 boards 3,932 digital boards
$1.1b in revenue from static boards $460m from digital boards
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Deleted
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Lamar
May 20, 2022 20:28:46 GMT
Post by Deleted on May 20, 2022 20:28:46 GMT
Thank you for posting. That is what a stock picker/dividend investor wants to achieve. What do you think of its outlook now?
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comlb
Lieutenant
Posts: 68
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Lamar
May 21, 2022 18:25:37 GMT
Post by comlb on May 21, 2022 18:25:37 GMT
@slooow, per M*, Lamar's five year average dividend is 4.3%. After the most recent dividend hike it is 5.1%, so that could be decent opportunity for a long term holder. They had a very good 2021, one of their advantages is supply, since NIMBYs keep the number of boards down, that works to their advantage. They are well diversified geographically across the US and across advertisers. Many people point to the rise of social media ads as a factor, but Lamar's biggest customers include Apple and Google. Single biggest is Cracker Barrel and there is no substitute for billboards to let people know that you are close to $4.99 pancakes.
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Deleted
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Lamar
May 21, 2022 18:41:50 GMT
Post by Deleted on May 21, 2022 18:41:50 GMT
Thank you. I will look into it. I saw one of their digital boards not too long ago in an airport and thought about Josh's recommendation.
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comlb
Lieutenant
Posts: 68
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Lamar
May 22, 2022 0:22:24 GMT
Post by comlb on May 22, 2022 0:22:24 GMT
As a dividend investor, it is easy to sort of get painted in a handful sectors- utilities, consumer, healthcare, banks, real estate. Nothing wrong with them, but they tend to move in groups - so I like to find reliable dividend payers outside of the normal sectors. Lamar is technically a REIT, a traditional dividend sector, but it is really an advertising/media stock in my view since that is where its cash flows come from.
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Lamar
May 25, 2022 15:54:47 GMT
Post by bb2 on May 25, 2022 15:54:47 GMT
Thanks for posting and reminding me of LAMR. I've owned LAMR twice, most recently, one of my pandemic panic buys. Sold last year. Advertising budgets, they say, are the first to get the axe but I've researched the effectiveness of billboards and they work. (I do remember as a kid when environmentalists cut down the billboards along an interstate where I lived.) Still, an economically sensitive business and the dividend will be challenged in a downturn, which by most accounts is coming. For me, it's too expensive here at this time. Advertising social media hits worry me a bit too. (SNAP) But I like the company and keep it on watch.
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Lamar
May 25, 2022 19:29:46 GMT
Post by bb2 on May 25, 2022 19:29:46 GMT
Just happened upon a Barron's piece on SNAP; Lamar was mentioned along with the other out of home advertisers, Clear Channel and Outfront. Says they have longer contracts so a downturn would have to persist for longer than the contracts to hit the biz. But I read the last quarter LAMR call just now too where they say they have 4 month contracts for the most part. Not that long. Also, you'd think their customers would have a decent feel for what's coming and pull back. We'll see. As an aside, LAMR seems to be very acquisitive and is turning into an upreit in June to facilitate M&A. (Sellers can dodge some immediate tax.) They're investing in digital too, meaning lighted, fancy billboards, computer controlled.
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Lamar
Jun 2, 2022 20:00:03 GMT
Post by bb2 on Jun 2, 2022 20:00:03 GMT
FWIW, Brad Thomas, in his June letter, has an underweight on Billboards with a trim on LAMR and a buy below $65. OUT is a sell and buy below $15.50.
In a recession with a div cut, I think you can get that price.
No commentary on either, just the table rows. (He has lists of REITs, with ratings, etc for each.)
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