CubeSmart (NYSE:CUBE – Get Free Report) and Lamar Advertising (NASDAQ:LAMR – Get Free Report) are both real estate companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.
Profitability
This table compares CubeSmart and Lamar Advertising’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CubeSmart | 29.41% | 12.35% | 5.03% |
| Lamar Advertising | 23.90% | 54.94% | 8.04% |
Earnings & Valuation
This table compares CubeSmart 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 | |
| CubeSmart | $1.12 billion | 8.21 | $333.78 million | $1.45 | 28.24 |
| Lamar Advertising | $2.33 billion | 6.58 | $587.15 million | $5.48 | 27.51 |
Lamar Advertising has higher revenue and earnings than CubeSmart. Lamar Advertising is trading at a lower price-to-earnings ratio than CubeSmart, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations for CubeSmart and Lamar Advertising, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CubeSmart | 0 | 9 | 6 | 0 | 2.40 |
| Lamar Advertising | 0 | 3 | 2 | 0 | 2.40 |
CubeSmart currently has a consensus price target of $43.50, indicating a potential upside of 6.23%. Lamar Advertising has a consensus price target of $160.17, indicating a potential upside of 6.23%. Given Lamar Advertising’s higher possible upside, analysts plainly believe Lamar Advertising is more favorable than CubeSmart.
Institutional & Insider Ownership
97.6% of CubeSmart shares are owned by institutional investors. Comparatively, 93.8% of Lamar Advertising shares are owned by institutional investors. 1.8% of CubeSmart 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, large money managers and endowments believe a company will outperform the market over the long term.
Dividends
CubeSmart pays an annual dividend of $2.12 per share and has a dividend yield of 5.2%. Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.2%. CubeSmart pays out 146.2% 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 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. CubeSmart has increased its dividend for 16 consecutive years and Lamar Advertising has increased its dividend for 5 consecutive years. CubeSmart is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
CubeSmart 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.
Summary
Lamar Advertising beats CubeSmart on 9 of the 16 factors compared between the two stocks.
About CubeSmart
CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.
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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