Billboard Stamina in the Digital Age

When I take a roadtrip, I usually set the GPS to avoid highways. It’s a great way to stumble across something fun and I like the lower speeds when I have the top down. Lately, I have spent more time on the highway.

Whether you’re cruising through Tennessee on the 40, traversing the east coast on the 95, or cutting across the south on the 10, one thing is for sure: you will see billboards everywhere. Recently, I’ve seen a lot of available real estate.

I’m a sucker for billboards. I have to read each one to make sure I don’t miss a local attraction or the next place to stop and gas up. I know that Lamar Advertising Company (LAMR) is the major player in the field. And I know that the company pays a dividend because it’s appeared on one of my stock screens more than once.

As I passed the company’s headquarters on my way to dinner in Baton Rouge last week, I wondered how they are faring with all those available billboards I’ve seen.

You Can’t Skip the Ads

Did you know that billboard advertising remains highly effective in the digital age? Unlike ads on your phone, you can’t scroll past these behemoths. And studies show that 80-85% of people remember billboard ads. This is a higher recall rate than for TV, radio, or online advertising. Digital billboards apparently get 400% more views than static ones.

Billboards are part of OOH (out of home) advertising which also includes transit ads and street furniture. These types of advertising are generally perceived as more trustworthy than digital ads.

LAMR operates over 160,000 billboard faces, which is three times its closest competitor. Its total OOH inventory is over 360,000 displays and includes the largest network of digital billboards in the US.

In 2025, LAMR closed 50 acquisitions for $191 million cash. And management expects another active M&A year in 2026 as well.

This massive portfolio generated $2.27 billion in revenues for 2025, up 2.7% year over year. Adjusted funds from operations (AFFO) for the year came in at $827.3 million or $8.26 per share, up 3.4% year over year.

Another REIT to Consider

The AFFO financial metric is important—it’s a stat used by REITs (real estate investment trusts). AFFO is typically calculated by subtracting certain recurring maintenance and leasing costs from FFO. The goal is a more realistic view of cash actually available for distribution after property upkeep.

REITs are required to distribute at least 90% of their taxable income as dividends, and AFFO tends to be more useful. We can also use AFFO rather than a price-to-earnings (P/E) ratio to tell if a REIT is fairly valued.

LAMR shares currently trade for around $138, or 16.7 times 2025 AFFO. For comparison, the current S&P 500 P/E is 29.5. LAMR is much better priced than the market overall. Generally, 14-18 times AFFO is a “good price” for a REIT.

Last year, LAMR paid out $6.45 to its shareholders or 78% of AFFO. REITs typically pay out 70-80% of AFFO to shareholders, so the dividend shouldn’t end up on the chopping block anytime soon.

Lamar will pay its next dividend of $1.60 on March 31 to shareholders on record as of March 16. That’s a 4.6% yield at current prices.

I already have a handful of REITs in my personal portfolio and not ready to add another one.

But if you are looking for exposure to real estate or advertising this could be a great addition to your portfolio. You should be able to collect a solid 4.6% yield for years to come. And as it continues to expand its portfolio there’s a chance for share price appreciation as well.

For more income, now and in the future,

Kelly Green