Billboard Giant Lamar Advertising Converts to REIT

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Giant billboard advertising company Lamar Advertising Company (ticker:LAMR) has completed a merger into its own subsidiary at midnight last night to officially complete a conversion into a real estate investment trust.

All shares of the predecessor company are automatically converted to shares in the new REIT.  The ticker symbol remains the same (LAMR).  The company began to pay a substantial dividend earlier in the year in anticipation of the conversion.  The dividend is now set at 83 cents/share quarterly–which equates into a current yield of approximately 6.2% based upon the current share price of around $53/share.  Lamar is a relatively profitable company-but the lions share of free cash flow from operations comes from depreciation.  The company takes huge annual non cash depreciation charges against earnings–around $250,000,000, while net earnings are around $75,000,000.  Adding back depreciation makes for a very healthy free cash situation.

When considering the shares of Lamar be aware that there are 2 classes of common shares–‘A’ shares and ‘B’ shares.  The ‘B’ shares have 10 votes per share and the ‘A’ shares (the shares us little people get to buy) have just 1 vote.  The founding family owns the ‘B’ shares and as such are in control of the company.

The company website is here–where one can do all the due diligence necessary before considering these shares.

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