Lamar Advertising (NASDAQ:LAMR) & Empire State Realty Trust (NYSE:ESRT) Critical Analysis

Empire State Realty Trust (NYSE:ESRT) and Lamar Advertising (NASDAQ:LAMR) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Valuation and Earnings

This table compares Empire State Realty Trust and Lamar Advertising”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Empire State Realty Trust	$755.13 million	2.49	$53.24 million	$0.30	38.03
Lamar Advertising	$2.16 billion	6.44	$495.76 million	$4.87	27.96

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

Dividends

Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 1.2%. Lamar Advertising pays an annual dividend of $5.60 per share and has a dividend yield of 4.1%. Empire State Realty Trust pays out 46.7% of its earnings in the form of a dividend. Lamar Advertising pays out 115.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

67.1% of Empire State Realty Trust shares are held by institutional investors. Comparatively, 93.8% of Lamar Advertising shares are held by institutional investors. 14.0% of Empire State Realty Trust shares are held by company insiders. Comparatively, 15.0% of Lamar Advertising shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Empire State Realty Trust and Lamar Advertising’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Empire State Realty Trust	5.89%	2.57%	1.06%
Lamar Advertising	23.34%	42.18%	7.69%

Analyst Ratings

This is a summary of current recommendations and price targets for Empire State Realty Trust and Lamar Advertising, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	1	1	1	0	2.00
Lamar Advertising	0	4	1	0	2.20

Empire State Realty Trust presently has a consensus target price of $10.33, suggesting a potential downside of 9.44%. Lamar Advertising has a consensus target price of $125.00, suggesting a potential downside of 8.19%. Given Lamar Advertising’s stronger consensus rating and higher probable upside, analysts clearly believe Lamar Advertising is more favorable than Empire State Realty Trust.

Volatility & Risk

Empire State Realty Trust has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Lamar Advertising has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.

Summary

Lamar Advertising beats Empire State Realty Trust on 13 of the 15 factors compared between the two stocks.

About Empire State Realty Trust

Empire State Realty Trust, Inc. (NYSE: ESRT) is a NYC-focused REIT that owns and operates a portfolio of modernized, amenitized, and well-located office, retail, and multifamily assets. The company is the recognized leader in energy efficiency and indoor environmental quality. ESRT’s flagship Empire State Building – the “World’s Most Famous Building” – includes its Observatory, Tripadvisor’s 2023 Travelers’ Choice Awards: Best of the Best the #1 attraction in the US for two consecutive years. As of September 30, 2023, ESRT’s portfolio is comprised of approximately 8.6 million rentable square feet of office space, 0.7 million rentable square feet of retail space and 727 residential units across three multifamily properties.

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.