Analyzing Lamar Advertising (NASDAQ:LAMR) & Gladstone Land (NASDAQ:LAND)

Gladstone Land (NASDAQ:LAND) and Lamar Advertising (NASDAQ:LAMR) are both real estate companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Gladstone Land and Lamar Advertising, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gladstone Land	1	2	0	1	2.25
Lamar Advertising	0	3	2	0	2.40

Gladstone Land currently has a consensus price target of $10.00, suggesting a potential upside of 12.65%. Lamar Advertising has a consensus price target of $160.17, suggesting a potential upside of 6.51%. Given Gladstone Land’s higher possible upside, equities analysts plainly believe Gladstone Land is more favorable than Lamar Advertising.

Institutional and Insider Ownership

53.6% of Gladstone Land shares are held by institutional investors. Comparatively, 93.8% of Lamar Advertising shares are held by institutional investors. 6.1% of Gladstone Land shares are held by insiders. Comparatively, 15.2% of Lamar Advertising shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Gladstone Land pays an annual dividend of $0.56 per share and has a dividend yield of 6.3%. Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.3%. Gladstone Land pays out -101.8% of its earnings in the form of a dividend. Lamar Advertising pays out 116.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Land has increased its dividend for 2 consecutive years and Lamar Advertising has increased its dividend for 5 consecutive years. Gladstone Land is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gladstone Land	-7.31%	-0.96%	-0.53%
Lamar Advertising	23.90%	54.94%	8.04%

Risk & Volatility

Gladstone Land has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Lamar Advertising has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Valuation & Earnings

This table compares Gladstone Land 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
Gladstone Land	$88.34 million	4.33	$13.53 million	($0.55)	-16.14
Lamar Advertising	$2.27 billion	6.74	$587.15 million	$5.48	27.44

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

Summary

Lamar Advertising beats Gladstone Land on 14 of the 18 factors compared between the two stocks.

About Gladstone Land

Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The Company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 169 farms, comprised of approximately 116,000 acres in 15 different states and over 45,000 acre-feet of banked water in California, valued at a total of approximately $1.6 billion. Gladstone Land’s farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 20-plus years and harvested annually. Approximately 40% of the Company’s fresh produce acreage is either organic or in transition to become organic, and over 10% of its permanent crop acreage falls into this category. The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 129 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common distributions 32 times over the prior 35 quarters, and the current per-share distribution on its common stock is $0.0464 per month, or $0.5568 per year.

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.