Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Lamar Advertising Co (LAMR), Clear Channel Outdoor Holdings, Inc. (CCO): Follow the Signs

The next time you take a road trip, pay attention to the billboards. Don’t just look at the actual billboard, where you might find a cow telling you to eat more chicken, look at the bottom of the billboard. You might see the name Lamar, which stands for Lamar Advertising Co (NASDAQ:LAMR).

The good news

In addition to digital, transit, and special product advertising, Lamar Advertising Co (NASDAQ:LAMR) is a big player in the billboard advertising market. These billboards can be found on highways, expressways, and primary arteries.

What many people might not know is that billboard advertising is arguably the best form of advertising in existence. The cost-per-thousand-impressions is the best an advertiser will find anywhere, which means demand is likely to remain high over the long haul.

Advertisers like billboards for other reasons as well. One of those reasons is that the ad can’t be closed, like a window on a computer. Also, according to Lamar Advertising Co (NASDAQ:LAMR), 71% of road travelers notice out-of-home ads, and out-of-home ads reach 96% of Americans each week.

Another big selling point is that approximately 33% of social media is now viewed on a mobile device, which is in thanks to the increased popularity of smartphones and tablets. This means consumers are more likely to spot a billboard ad and share it with friends while on the road. (Hopefully, they’re not the ones driving.)

Lamar Advertising (LAMR)Those interested in fashion and cars are the most likely to share a billboard ad. In regards to age, the 18-24 demographic is mostly likely to tweet an out-of-home ad. The point here is that billboards have the potential to reach various types of consumers. Therefore, advertisers are likely to desire billboard ads through Lamar Advertising Co (NASDAQ:LAMR).

The bad news

Lamar Advertising Co (NASDAQ:LAMR) aims to become a REIT, but the IRS stated that this process has been delayed because it wants to look further into qualification measures.

The Wall Street Journal describes a REIT adeptly: “REITs don’t pay corporate income taxes on the taxable income they distribute to shareholders as a dividend, and they must pay out at least 90% of taxable income to qualify. Because of those hefty payments, REITs are popular with individual investors seeking higher yielding securities.”

Lamar Advertising Co (NASDAQ:LAMR)’s company culture also leaves a lot to be desired, and some anonymous employee comments are concerning.

According to, employees have rated their employer a 2.5 of 5, and only 24% of employees would recommend the company to a friend. One of the biggest complaints is the commission rate, which seems to be around 1.2% to 2%. Other complaints include salespeople being spread too thin due to cuts in other areas, unqualified managers, and the company’s poor reputation throughout the industry.

Lamar vs. peers

Lamar Advertising Co (NASDAQ:LAMR)’s revenue has improved over the past two years after two years of declines. Lamar has also seen two years of earnings improvements after two years of losses. However, with a profit margin just north of 2% and a trailing P/E of 46, there isn’t much margin for error. Lamar also owns a debt-to-equity ratio of 2.45, which is well above the industry average of 0.8. This could impede growth potential, especially if the economy weakens.

Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) saw revenue decline in 2012, it has reported losses in four of the last five years, and it has also been in the red in three of the last four quarters. According to an anonymous employee reporting on, its restructuring plan has been ineffective thus far.

Clear Channel Outdoor Holdings, Inc. (NYSE:CCO)’s profit margin of -7.25% is worrisome, but its debt-to-equity ratio of 14.41 is even more concerning. To make matters worse, Clear Channel is trading at 750 times earnings, making it one of the most expensive stocks throughout the broader market. With financials this bad, it’s surprising that the short position on Clear Channel Outdoor is only 4%.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.