Seeking Alpha Looks At Outfront Media

Insider likes and reads Seeking Alpha.  Brad Thomas is one of my favorite writers on the site. His focus is on Real Estate Investment Trusts, or REITS, a community that includes both Lamar and Outfront.

Brad wrote an article this week focused on Outfront Media as well as the OOH industry as a whole and it is worth your time to read.   We tend to read what others in our own industry think of us, so it is nice to get a chance to get some input from a thoughtful investment outsider.

Lots of takeaways, but he starts with a recent visit he had to New York City and how he was impacted by the number of billboards with many promoting top retailers.  He goes on to say that

Billboards in New York City simply create buzz that in turn prompts the consumer to engage in a specific audience or direct them to the retailer’s front door (real or virtual). Well-placed digital media is a perfect conduit for consumers to engage through social and mobile integration and use apps more efficiently.

Some other key points include:

  • OUTFRONT reaches 71% of the national population each week.

 

  • Outfront’s OOH platform continues to hold and grow market shares simply because internet growth is fueled by mobile demand. Print is shrinking considerably and radio is constant, but the internet is the future.

 

  • New York City represents 23% of Outfront’s total revenue, followed by LA (14%), and Washington, DC (5%).

 

  • Thomas provides a solid run down on 1st Quarter 2017 reported results with comparisons to Lamar.

 

  • While Lamar’s shows strength over Outfront on several key operating ratios, Outfront has a much higher dividend yield of 6.2% versus Lamar’s 4.6%.

The Bottom Line: Outfront’s Q-17 results were weak and the market has priced the shares accordingly. However, he believes that the demand for the company’s products, especially in the key gateway markets like New York City, LA, and Miami, will have a strong impact in future quarters, especially because of the growth in OOH.

 

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