Critical Contrast: Public Storage (NYSE:PSA) vs. Lamar Advertising (NASDAQ:LAMR)

Public Storage (NYSE:PSA) and Lamar Advertising (NASDAQ:LAMR) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Risk and Volatility

Public Storage has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Lamar Advertising has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Public Storage and Lamar Advertising, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Public Storage	0	12	6	2	2.50
Lamar Advertising	0	3	3	0	2.50

Public Storage presently has a consensus target price of $309.78, indicating a potential downside of 0.41%. Lamar Advertising has a consensus target price of $143.60, indicating a potential downside of 9.07%. Given Public Storage’s higher probable upside, research analysts plainly believe Public Storage is more favorable than Lamar Advertising.

Valuation and Earnings

This table compares Public Storage and Lamar Advertising”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Public Storage	$4.82 billion	11.32	$1.78 billion	$9.69	32.10
Lamar Advertising	$2.27 billion	7.06	$587.15 million	$5.42	29.14

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

Institutional & Insider Ownership

78.8% of Public Storage shares are owned by institutional investors. Comparatively, 93.8% of Lamar Advertising shares are owned by institutional investors. 11.1% of Public Storage shares are owned by company insiders. Comparatively, 15.2% of Lamar Advertising shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Public Storage and Lamar Advertising’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Public Storage	39.16%	37.78%	9.43%
Lamar Advertising	24.01%	55.53%	8.04%

Dividends

Public Storage pays an annual dividend of $12.00 per share and has a dividend yield of 3.9%. Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.1%. Public Storage pays out 123.8% 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 118.1% 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 has increased 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

Public Storage beats Lamar Advertising on 10 of the 17 factors compared between the two stocks.

About Public Storage

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns, and operates self-storage facilities. At December 31, 2023, we had: (i) interests in 3,044 self-storage facilities located in 40 states with approximately 218 million net rentable square feet in the United States and (ii) a 35% common equity interest in Shurgard Self Storage Limited (Euronext Brussels: SHUR), which owned 275 self-storage facilities located in seven Western European nations with approximately 15 million net rentable square feet operated under the Shurgard brand. Our headquarters are located in Glendale, California.

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.