Financial Survey: W.P. Carey (NYSE:WPC) and Lamar Advertising (LAMR)

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

Profitability

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

Net Margins Return on Equity Return on Assets
W.P. Carey 34.97% 8.10% 3.35%
Lamar Advertising 19.75% 28.21% 7.65%

Dividends

W.P. Carey pays an annual dividend of $4.00 per share and has a dividend yield of 6.0%. Lamar Advertising pays an annual dividend of $3.32 per share and has a dividend yield of 5.2%. W.P. Carey pays out 154.4% 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 pays out 109.2% 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 increased 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.

Analyst Ratings

This is a breakdown of recent ratings for W.P. Carey and Lamar Advertising, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W.P. Carey 1 2 1 0 2.00
Lamar Advertising 0 3 2 0 2.40

W.P. Carey presently has a consensus target price of $67.67, suggesting a potential upside of 0.84%. Lamar Advertising has a consensus target price of $74.25, suggesting a potential upside of 15.58%. Given Lamar Advertising’s stronger consensus rating and higher possible upside, analysts plainly believe Lamar Advertising is more favorable than W.P. Carey.

Institutional and Insider Ownership

49.1% of W.P. Carey shares are owned by institutional investors. Comparatively, 86.8% of Lamar Advertising shares are owned by institutional investors. 1.3% of W.P. Carey shares are owned by insiders. Comparatively, 18.7% of Lamar Advertising shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

W.P. Carey has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Lamar Advertising has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Earnings and Valuation

This table compares W.P. Carey and Lamar Advertising’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
W.P. Carey $884.48 million 8.11 $722.42 million $2.59 25.91
Lamar Advertising N/A N/A N/A $3.04 21.13

W.P. Carey has higher revenue and 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.

Summary

Lamar Advertising beats W.P. Carey on 11 of the 15 factors compared between the two stocks.

About W.P. Carey

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.

About Lamar Advertising

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.

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