Lamar Advertising (NASDAQ:LAMR – Get Free Report) and Diversified Healthcare Trust (NASDAQ:DHC – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.
Risk and Volatility
Lamar Advertising has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 2.09, indicating that its stock price is 109% more volatile than the S&P 500.
Institutional & Insider Ownership
93.8% of Lamar Advertising shares are owned by institutional investors. Comparatively, 76.0% of Diversified Healthcare Trust shares are owned by institutional investors. 15.0% of Lamar Advertising shares are owned by company insiders. Comparatively, 1.4% of Diversified Healthcare Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lamar Advertising | 0 | 2 | 0 | 0 | 2.00 |
| Diversified Healthcare Trust | 0 | 0 | 1 | 0 | 3.00 |
Lamar Advertising currently has a consensus target price of $109.50, suggesting a potential downside of 4.85%. Diversified Healthcare Trust has a consensus target price of $4.50, suggesting a potential upside of 71.76%. Given Diversified Healthcare Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Diversified Healthcare Trust is more favorable than Lamar Advertising.
Earnings and Valuation
This table compares Lamar Advertising and Diversified Healthcare Trust’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lamar Advertising | $2.11 billion | 5.56 | $495.76 million | $4.87 | 23.63 |
| Diversified Healthcare Trust | $1.41 billion | 0.45 | -$293.57 million | ($1.23) | -2.13 |
Lamar Advertising has higher revenue and earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Lamar Advertising, indicating that it is currently the more affordable of the two stocks.
Dividends
Lamar Advertising pays an annual dividend of $5.20 per share and has a dividend yield of 4.5%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.5%. Lamar Advertising pays out 106.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Healthcare Trust pays out -3.3% of its earnings in the form of a dividend. Lamar Advertising has increased its dividend for 4 consecutive years. Lamar Advertising is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Lamar Advertising and Diversified Healthcare Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lamar Advertising | 23.29% | 41.80% | 7.60% |
| Diversified Healthcare Trust | -20.82% | -11.90% | -5.28% |
Summary
Lamar Advertising beats Diversified Healthcare Trust on 12 of the 17 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 Diversified Healthcare Trust
DHC is a real estate investment trust, or REIT, focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum by care delivery and practice type, by scientific research disciplines and by property type and location. As of December 31, 2023, DHC's approximately $7.2 billion portfolio included 371 properties in 36 states and Washington, D.C., occupied by approximately 500 tenants, and totaling approximately 8.6 million square feet of life science and medical office properties and more than 27,000 senior living units. DHC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. DHC is headquartered in Newton, MA.
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