Farmland Partners (NYSE:FPI) and Lamar Advertising (NASDAQ:LAMR) Financial Analysis

Lamar Advertising (NASDAQ:LAMR) and Farmland Partners (NYSE:FPI) are both real estate companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Volatility and Risk

Lamar Advertising has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Farmland Partners has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Insider & Institutional Ownership

93.8% of Lamar Advertising shares are held by institutional investors. Comparatively, 58.0% of Farmland Partners shares are held by institutional investors. 15.2% of Lamar Advertising shares are held by insiders. Comparatively, 7.9% of Farmland Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Lamar Advertising and Farmland Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamar Advertising	0	3	2	0	2.40
Farmland Partners	0	4	0	0	2.00

Lamar Advertising currently has a consensus price target of $160.17, suggesting a potential upside of 9.10%. Given Lamar Advertising’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Lamar Advertising is more favorable than Farmland Partners.

Profitability

This table compares Lamar Advertising and Farmland Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lamar Advertising	23.90%	54.94%	8.04%
Farmland Partners	49.85%	5.54%	3.58%

Earnings and Valuation

This table compares Lamar Advertising and Farmland Partners”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamar Advertising	$2.27 billion	6.58	$587.15 million	$5.48	26.79
Farmland Partners	$52.18 million	9.16	$31.55 million	$0.51	21.49

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

Dividends

Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.4%. Farmland Partners pays an annual dividend of $0.36 per share and has a dividend yield of 3.3%. Lamar Advertising pays out 116.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Farmland Partners pays out 70.6% of its earnings in the form of a dividend. Lamar Advertising has raised its dividend for 5 consecutive years. Lamar Advertising is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Lamar Advertising beats Farmland Partners on 14 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 Farmland Partners

Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of December 31, 2023, the Company owns and/or manages approximately 171,100 acres in 16 states, including Arkansas, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, the Company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. The Company has approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.