Critical Comparison: Arbor Realty Trust (NYSE:ABR) versus Lamar Advertising (NASDAQ:LAMR)

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

Dividends

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

Volatility and Risk

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

Analyst Recommendations

This is a summary of current recommendations for Lamar Advertising and Arbor Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamar Advertising	0	4	1	0	2.20
Arbor Realty Trust	2	2	2	0	2.00

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lamar Advertising	23.34%	42.18%	7.69%
Arbor Realty Trust	24.59%	15.75%	2.68%

Institutional and Insider Ownership

93.8% of Lamar Advertising shares are owned by institutional investors. Comparatively, 57.3% of Arbor Realty Trust shares are owned by institutional investors. 15.0% of Lamar Advertising shares are owned by insiders. Comparatively, 3.7% of Arbor Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

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

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

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.

Summary

Lamar Advertising beats Arbor Realty Trust on 11 of the 17 factors compared between the two stocks.

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.

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.