Analyzing CubeSmart (NYSE:CUBE) and Lamar Advertising (NASDAQ:LAMR)

Lamar Advertising (NASDAQ:LAMR) and CubeSmart (NYSE:CUBE) are both real estate companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Insider & Institutional Ownership

93.8% of Lamar Advertising shares are owned by institutional investors. Comparatively, 97.6% of CubeSmart shares are owned by institutional investors. 15.2% of Lamar Advertising shares are owned by company insiders. Comparatively, 1.8% of CubeSmart shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Lamar Advertising and CubeSmart’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%
CubeSmart	29.41%	12.35%	5.03%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Lamar Advertising and CubeSmart, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamar Advertising	0	3	2	0	2.40
CubeSmart	0	9	6	0	2.40

Lamar Advertising presently has a consensus target price of $160.17, suggesting a potential upside of 3.02%. CubeSmart has a consensus target price of $43.50, suggesting a potential upside of 4.72%. Given CubeSmart’s higher probable upside, analysts plainly believe CubeSmart is more favorable than Lamar Advertising.

Earnings & Valuation

This table compares Lamar Advertising and CubeSmart”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamar Advertising	$2.27 billion	6.97	$587.15 million	$5.48	28.37
CubeSmart	$1.14 billion	8.23	$333.78 million	$1.45	28.65

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.

Dividends

Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.1%. CubeSmart pays an annual dividend of $2.12 per share and has a dividend yield of 5.1%. 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 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 has raised its dividend for 5 consecutive years and CubeSmart has raised its dividend for 16 consecutive years. CubeSmart is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Lamar Advertising has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, CubeSmart has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

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 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.