Smartstop Self Storage REIT (NYSE:SMA) vs. Lamar Advertising (NASDAQ:LAMR) Critical Analysis

Lamar Advertising (NASDAQ:LAMR) and Smartstop Self Storage REIT (NYSE:SMA) are both real estate companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Profitability

This table compares Lamar Advertising and Smartstop Self Storage REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lamar Advertising	23.90%	54.94%	8.04%
Smartstop Self Storage REIT	9.68%	2.33%	1.23%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Lamar Advertising and Smartstop Self Storage REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamar Advertising	0	3	2	0	2.40
Smartstop Self Storage REIT	1	3	4	2	2.70

Lamar Advertising presently has a consensus target price of $160.17, indicating a potential upside of 4.97%. Smartstop Self Storage REIT has a consensus target price of $36.47, indicating a potential upside of 7.71%. Given Smartstop Self Storage REIT’s stronger consensus rating and higher probable upside, analysts plainly believe Smartstop Self Storage REIT is more favorable than Lamar Advertising.

Dividends

Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.2%. Smartstop Self Storage REIT pays an annual dividend of $1.63 per share and has a dividend yield of 4.8%. 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. Smartstop Self Storage REIT pays out 319.6% 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 has raised its dividend for 5 consecutive years.

Valuation and Earnings

This table compares Lamar Advertising and Smartstop Self Storage REIT”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamar Advertising	$2.27 billion	6.84	$587.15 million	$5.48	27.84
Smartstop Self Storage REIT	$281.14 million	6.67	-$1.55 million	$0.51	66.39

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

Insider and Institutional Ownership

93.8% of Lamar Advertising shares are held by institutional investors. 15.2% of Lamar Advertising shares are held by insiders. Comparatively, 5.7% of Smartstop Self Storage REIT shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

Lamar Advertising has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Smartstop Self Storage REIT has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Summary

Lamar Advertising beats Smartstop Self Storage REIT on 12 of the 18 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 Smartstop Self Storage REIT

Symmetry Medical Inc. (Symmetry) is a medical device solutions company, including surgical instruments, orthopedic implants, and sterilization cases and trays. The Company designs, develops and offers worldwide production and supply chain capabilities for these products to customers in the orthopedic industry, and other medical device markets (including but not limited to arthroscopy, dental, laparoscopy, osteobiologic, and endoscopy segments). It also manufactures specialized non-healthcare products, primarily in the aerospace industry. The Company operates in two segments: original equipment manufacturer (OEM) solutions and symmetry surgical. On August 15, 2011, the Company acquired PSC Industries, Inc’s Olsen Medical division. On December 29, 2011 it acquired the surgical instruments product portfolio from Codman & Shurtleff, Inc., a Johnson & Johnson Company.