Arbor Realty Trust (NYSE:ABR – Get Free Report) and Lamar Advertising (NASDAQ:LAMR – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.
Profitability
This table compares Arbor Realty Trust and Lamar Advertising’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Arbor Realty Trust | 24.59% | 15.75% | 2.68% |
Lamar Advertising | 23.34% | 42.18% | 7.69% |
Earnings & Valuation
This table compares Arbor Realty Trust and Lamar Advertising”s top-line revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Arbor Realty Trust | $683.14 million | 4.13 | $371.43 million | $1.61 | 9.30 |
Lamar Advertising | $2.16 billion | 6.27 | $495.76 million | $4.87 | 27.23 |
Risk & Volatility
Arbor Realty Trust has a beta of 2.05, suggesting that its share price is 105% 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.
Dividends
Arbor Realty Trust pays an annual dividend of $1.72 per share and has a dividend yield of 11.5%. Lamar Advertising pays an annual dividend of $5.60 per share and has a dividend yield of 4.2%. Arbor Realty Trust pays out 106.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Arbor Realty Trust has increased its dividend for 12 consecutive years. Arbor Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
57.3% of Arbor Realty Trust shares are held by institutional investors. Comparatively, 93.8% of Lamar Advertising shares are held by institutional investors. 3.7% of Arbor Realty Trust shares are held by insiders. Comparatively, 15.0% of Lamar Advertising shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings for Arbor Realty Trust and Lamar Advertising, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Arbor Realty Trust | 2 | 2 | 2 | 0 | 2.00 |
Lamar Advertising | 0 | 4 | 1 | 0 | 2.20 |
Arbor Realty Trust presently has a consensus target price of $13.92, suggesting a potential downside of 7.10%. Lamar Advertising has a consensus target price of $125.00, suggesting a potential downside of 5.74%. Given Lamar Advertising’s stronger consensus rating and higher possible upside, analysts plainly believe Lamar Advertising is more favorable than Arbor Realty Trust.
Summary
Lamar Advertising beats Arbor Realty Trust on 11 of the 17 factors compared between the two stocks.
About Arbor Realty Trust
Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower's equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.
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.
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