Lamar Advertising (NASDAQ:LAMR) & Arbor Realty Trust (NYSE:ABR) Critical Survey

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

Valuation and Earnings

This table compares Arbor Realty Trust and Lamar Advertising”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arbor Realty Trust	$683.14 million	4.22	$371.43 million	$1.61	9.49
Lamar Advertising	$2.16 billion	6.21	$495.76 million	$4.87	26.98

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

Institutional and Insider 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 company insiders. Comparatively, 15.0% of Lamar Advertising shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets 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 currently has a consensus target price of $13.92, indicating a potential downside of 9.51%. Lamar Advertising has a consensus target price of $125.00, indicating a potential downside of 4.74%. Given Lamar Advertising’s stronger consensus rating and higher probable upside, analysts plainly believe Lamar Advertising is more favorable than Arbor Realty Trust.

Risk and Volatility

Arbor Realty Trust has a beta of 2.05, indicating that its share price is 105% more volatile than the S&P 500. Comparatively, Lamar Advertising has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.

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%

Dividends

Arbor Realty Trust pays an annual dividend of $1.72 per share and has a dividend yield of 11.3%. Lamar Advertising pays an annual dividend of $5.60 per share and has a dividend yield of 4.3%. 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 raised 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.

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.