Lamar(US:LAMR) ZACKSยท2024-08-20 16:30Core Viewpoint - Lamar Advertising has demonstrated strong financial performance and growth potential, reflected in its stock price increase and solid operational metrics, driven by local advertising demand and strategic acquisitions [1][2][3]. Financial Performance - In Q2 2024, Lamar reported adjusted funds from operations (AFFO) per share of $2.08, exceeding the Zacks Consensus Estimate of $2.07 and up from $1.90 in the prior year [2]. - The company achieved nearly 7% growth in adjusted EBITDA and 9.5% growth in diluted AFFO per share, maintaining guidance for full-year diluted AFFO per share between $7.75 and $7.90 [3]. Revenue Sources - Local and regional sales accounted for 79% of billboard revenues in Q2 2024, with these sales growing for the 13th consecutive quarter, indicating a stable revenue base [5]. - The company has a diversified tenant base across various sectors, which contributes to reduced revenue volatility [4][5]. Strategic Initiatives - Lamar has focused on upgrading its advertising portfolio and enhancing digital capabilities, with digital revenues representing approximately 30% of billboard billings [6]. - The company completed 36 acquisitions for $139 million in 2023 and 73 acquisitions for $479.8 million in 2024, indicating aggressive expansion efforts [8]. Market Position - As one of the largest outdoor advertising operators in the U.S., Lamar holds a significant market share and benefits from a strong national footprint [4]. - The company has a historical cash flow growth rate of 8.25%, significantly higher than the industry average of 2.57%, and a return on equity (ROE) of 42.18%, compared to the industry average of 3.26% [9]. Dividend Policy - Lamar has consistently raised its dividend, with a five-year annualized growth rate of 16.50%, which enhances investor confidence [10].