Is Lamar Advertising a Strong REIT Play for 2026 Investors?

Lamar Advertising Company LAMR has quietly built a reputation as one of the most consistent players in the out-of-home advertising space. While digital ads grab headlines, Lamar’s billboards, transit displays and airport advertising continue to attract both local businesses and national brands. The company is not only holding up well in a mixed ad market, but also positioning itself for better momentum ahead. 

The Zacks Consensus Estimate for 2025 and 2026 funds from operations per share has moved higher over the past months to $8.19 and $8.83, calling for year-over-year growth of 2.50% and 7.81%, respectively.

Over the past three months, shares of this Zacks Rank #2 (Buy) company have rallied 7.3% against the industry's decline of 0.9%. Given the strength of its fundamentals, this stock seems to have additional room for growth.

Price Performance

Factors That Make Lamar Stock a Solid Pick

A Resilient Local Advertising Base: Local and regional advertisers accounted for approximately 78% of billboard revenues in the quarter. This segment has now grown for 18 consecutive quarters, underscoring the durability of Lamar’s core customer base and reducing reliance on more volatile national ad budgets.

Digital Billboards Are Becoming a Bigger Earnings Driver: Digital billboards grew 5% during the quarter and now make up about 31% of total billboard revenues. Lamar operates more than 5,400 digital billboard faces across 155 markets, with same-board digital revenues up 3.4%. Digital assets allow faster pricing adjustments and attract both national and programmatic advertisers. Therefore, Lamar continues to convert static boards into higher-yield digital assets, improving flexibility for advertisers and supporting long-term revenue growth.

A Conservative and Flexible Balance Sheet: Lamar ended the third quarter with net debt at about 3x EBITDA, one of the lowest leverage levels in its history. Total liquidity stood near $834 million, and the company refinanced key debt maturities, resulting in a weighted average interest rate of roughly 4.6% and an average debt maturity of about five years.

Acquisitions Continue to Add Scale and Support Growth: Lamar remains an active and disciplined acquirer in the out-of-home space, focusing on smaller, accretive deals that strengthen its local market presence. For the full year 2025, the company planned deployment of close to $300 million on acquisitions, including the Verde transaction. Management estimates Lamar has more than $1 billion of investment capacity while staying within the leverage targets, allowing it to keep expanding without pressuring the balance sheet.

Dividend Payouts Attract Income-Focused Investors: Solid dividend payouts remain the biggest attraction for REIT investors and Lamar has been committed to the same. In December 2025, Lamar also declared a special dividend. In the past five years, the company has raised its dividend nine times. Its five-year annualized dividend growth rate is 13.94%, which is encouraging. Such efforts raise investors’ optimism about the stock.

Taken together, Lamar combines stable demand, growing digital exposure, a strong balance sheet and dependable income. For investors seeking a resilient REIT with clear operating momentum, LAMR deserves serious consideration.

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Prologis PLD and First Industrial Realty Trust FR. Both Prologis and First Industrial Realty Trust carry a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Prologis’ 2025 FFO per share is pegged at $5.80, which indicates year-over-year growth of 4.32%.

The consensus estimate for First Industrial Realty Trust’s 2025 FFO per share stands at $2.96, which calls for an increase of 11.70% from the year-ago period. 

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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