Financial Analysis: Equinix (NASDAQ:EQIX) versus Lamar Advertising (NASDAQ:LAMR)

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

Dividends

Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.2%. Equinix pays an annual dividend of $20.64 per share and has a dividend yield of 2.0%. 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. Equinix pays out 132.9% 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 increased its dividend for 5 consecutive years and Equinix has increased its dividend for 10 consecutive years. Lamar Advertising is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Lamar Advertising has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Equinix has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

93.8% of Lamar Advertising shares are held by institutional investors. Comparatively, 94.9% of Equinix shares are held by institutional investors. 15.2% of Lamar Advertising shares are held by company insiders. Comparatively, 0.3% of Equinix shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Lamar Advertising and Equinix’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%
Equinix	15.64%	10.76%	3.83%

Earnings & Valuation

This table compares Lamar Advertising and Equinix”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	6.77	$587.15 million	$5.48	27.57
Equinix	$9.22 billion	11.00	$1.35 billion	$15.53	66.17

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

Analyst Recommendations

This is a breakdown of recent recommendations for Lamar Advertising and Equinix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamar Advertising	0	3	2	0	2.40
Equinix	0	4	21	2	2.93

Lamar Advertising presently has a consensus target price of $160.17, suggesting a potential upside of 6.01%. Equinix has a consensus target price of $1,203.40, suggesting a potential upside of 17.11%. Given Equinix’s stronger consensus rating and higher possible upside, analysts plainly believe Equinix is more favorable than Lamar Advertising.

Summary

Equinix beats Lamar Advertising on 11 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 Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company . Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.