Lamar Advertising vs. Clear Channel Outdoor

Lamar Advertising Company (AMR) is one of the largest outdoor advertising companies in North America, with more than 352,000 displays in the United States and Canada. On the other hand, Clear Channel Outdoor Holdings, Inc. (CCO) owns, operates and sells display advertising in the United States and around the world. It operates through two segments, the Americas and Europe.

Outdoor advertising is marketing in public places that promotes services or products. As the lifting of COVID-19 restrictions has led to outdoor visibility resuming, the industry is seeing a rebound. Additionally, increasing adoption of digital technologies in outdoor advertising is expected to boost the growth of the industry. The global outdoor advertising market is expected to grow at a pace 3.6% CAGR to reach $33.1 billion by 2026. Therefore, LAMR and CCO stand to benefit.

But which of these two stocks is a better buy now? Let’s find out.

Latest developments

On May 19, 2022, LAMR announced that its Board of Directors declared a quarterly cash dividend of $1.20 per share payable June 30, 2022 to registered shareholders of its Class A common stock and Class A common stock. B on June 20, 2022. .

On June 2, 2022, CCO announced a reinvented approach for brands to stand out and break through to consumers at street level with its Out-of-Home Showcase Shelters, a fully customizable advertising reboot of the traditional bus shelter. This could lead to a growing demand for its solution.

Recent financial results

LAMR’s net revenue increased 21.7% year-over-year to $451.39 million for the fiscal first quarter ended March 31, 2022. The company’s adjusted EBITDA increased 25 .5% year-on-year to $191.25 million, while its net profit was $92.15 million. , representing a 140.4% year-over-year increase. Additionally, its EPS was $0.91, up 139.5% year-over-year.

CCO’s revenue increased 41.7% year-over-year to $525.69 million for the fiscal first quarter ended March 31, 2022. The company’s adjusted EBITDA was $66.10 million, compared to a loss of $32.67 million in the prior year quarter. Its net loss was $89.73 million, down 73.1% year-over-year.

Expected financial performance

Analysts expect LAMR’s revenue to grow 10.1% for the quarter ending June 30, 2022 and 10.7% for fiscal 2022. The company’s EPS is expected to rise 7.6 % for the quarter ending June 30, 2022 and 28.2% for fiscal 2022. Additionally, its EPS is expected to grow 3% annually over the next five years.

On the other hand, CCO’s revenue is expected to increase by 28.7% for the quarter ending June 30, 2022 and by 16.4% in fiscal 2022. Its EPS is expected to increase by 85.2% for the quarter ending June 30, 2022 and 83.9% in fiscal 2022. In addition, the company’s EPS is expected to grow 7% annually over the next five years.

Profitability

CCO’s revenue over the last 12 months is 1.28 times what LAMR generates. However, LAMR is more profitable, with gross profit margin and EBITDA margin of 67.79% and 44.54% compared to CCO of 46.03% and 21.42%, respectively.

Moreover, LAMR’s ROA and ROTC of 5.90% and 6.46% are higher than CCO’s of 3.12% and 4.04%, respectively.

Evaluation

In terms of before EV/S, LAMR is currently trading at 7.13x, 147.6% higher than CCO’s 2.88x. In addition, CCO’s forecast EV/EBITDA ratio of 15.39x is 16.4% higher than CCO’s 13.22x.

Thus, CCO is relatively affordable here.

POWR Rankings

LAMR has an overall rating of B, which is equivalent to a buy in our own POWR Rankings system. On the other hand, CCO has an overall rating of C, which translates to Neutral. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

LAMR has a B rating for Sentiment, in line with analysts’ expectations that its EPS and revenue will increase in the coming months. On the other hand, CCO has a C rating for Sentiment, in line with analysts’ expectations that its EPS will remain negative in the current quarter and year.

Among the 50 stocks rated B REIT – Diversified industry, LAMR is ranked #2. However, CCO is ranked #6 out of 21 stocks in the D-rated Advertising industry.

Beyond what I said above, we also rated the stocks in terms of growth, value, quality, stability and momentum. Click here to see all LAMR ratings. Also get all the CCO ratings here.

The winner

The outdoor advertising industry is expected to grow exponentially with increasing demand this year and beyond. While LAMR and CCO are both expected to win, LAMR is best bet now due to its higher profit margin and financial strength.

Our research shows that the odds of success increase when investing in stocks with an overall buy or strong buy rating. See all of the REIT’s other top-rated stocks – Diversified Sector here. Also, Click here to access all the top rated stocks in the advertising industry.


LAMR shares. Year-to-date, the LAMR is down -22.32%, compared to a -15.22% rise in the benchmark S&P 500 over the same period.

About the Author: Nimesh Jaiswal

At Nimesh Jaiswal His passionate interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving the price of a stock is the key approach he follows while advising investors in his articles. After…

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