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Lamar (LAMR) Rewards Investors With Quarterly Dividend Hike

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Lamar Advertising Company LAMR recently announced a 33.3% sequential hike in its quarterly cash dividend. The company will now pay a dividend of $1.00 per share, up from the 75 cents paid out earlier. This marks the company’s second dividend raise in 2021 and brings the level back to the pre-pandemic rate.

Based on the increased rate, the annual dividend comes to $4.00 a share, resulting in an annualized yield of 3.5%, considering Lamar’s closing price of $114.04 on Sep 8. The increased dividend will be paid out on Sep 30, to stockholders of record of the company’s Class A common stock and Class B common stock as of Sep 20, 2021.

Solid dividend payouts remain the biggest enticement for investors in real estate investment trusts (REIT) and Lamar has been committed toward boosting shareholder wealth.

However, in light of the pandemic that disrupted the macro economy and the company’s business, Lamar continued with its dividend payment, though at a reduced rate, paying a dividend of 50 cents instead of the prior payment of $1.

However, in February of this year, Lamar announced a quarterly dividend of 75 cents per share, which marked a 50% increase from the 50 cents paid in the prior quarter. In addition, with the latest hike to $1, the dividend reached the pre-pandemic rate, bringing additional relief for investors and reaffirming confidence in this REIT.

Lamar’s second-quarter 2021 results reflected an improvement in its top-line growth. The company raised the fund from operations (FFO) guidance for 2021 based on the strong momentum in its business.

According to the company’s chief executive Sean Reilly, “Billboard revenues for the period surpassed revenues for the comparable quarter in 2019, while bookings in the transit and airport business continued to improve. Logos delivered its typical solid performance.”

Lamar has an impressive footprint of outdoor advertising assets and holds a leading position as a provider of logo signs in the United States. Technological advancements in the outdoor advertising segments, low-cost and fragmentation of other advertising media are aiding this shift to outdoor advertising.

A diversified tenant base across various sectors and an increased focus on bolstering its digital capabilities also act as tailwinds. These will likely help the company generate decent cash flows and sustain its dividend at the latest level.

Shares of this Zacks Rank #3 (Hold) company have gained 7.7% over the past three months, outperforming the industry’s growth of 3.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Zacks Investment Research

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The Zacks Consensus Estimate for Public Storage’s PSA current-year FFO per share has moved up 3.6% to $12.35 in the past month. The company currently carries a Zacks Rank of 2 (Buy).

The Zacks Consensus Estimate for OUTFRONT Media Inc.’s OUT 2021 FFO per share has moved 3.4% north to 90 cents over the past month. The company carries a Zacks Rank of 2, currently.

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Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Public Storage (PSA) : Free Stock Analysis Report

Lamar Advertising Company (LAMR) : Free Stock Analysis Report

Extra Space Storage Inc (EXR) : Free Stock Analysis Report

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