Caris & Company analyst David Miller upgraded Lamar Advertising (LAMR) to Buy today as the company’s strong cash generation and its valuation make it particularly attractive. Shares are up 1.1% today. Competitor Clear Channel Outdoor (CCO) is up 1.3%.
The billboard advertising company’s capital expenditures have fallen considerably, because the prices of digital billboards that Lamar buys have fallen in the past few years. That frees up cash for other things, including a possible dividend:
“[W]ith a current FCF yield of 10.3% and with LAMR continuing to be aggressive in lowering interest expense through opportunistic re-financings, we believe the LAMR board may be considering a dividend on its common shares, which could offer meaningful downside protection against occasional blow-ups which tend to occur around earnings calls.”
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