Lamar Advertising Company (LAMR) just gave income investors another reason to take notice. The outdoor-advertising real estate investment trust raised its quarterly dividend by 3.1% to $1.65 per share on Sept. 1. This increase gives the stock a forward yield of roughly 4.4%, making it an appealing option for investors looking for above-average income.
The bigger story, however, is the cash flow supporting that higher payout. Lamar’s dividend hike followed a strong second quarter, when revenue rose 6.5% year-over-year (YoY) to $616.7 million. Its adjusted funds from operations, or AFFO, per share, climbed 8.1%. Those gains led management to raise its 2026 AFFO outlook to between $8.75 and $8.90 per share.
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With advertising demand holding up, digital out-of-home inventory providing a potential growth lever, and its dividend now yielding more than 4%, can Lamar Advertising’s improving cash flow justify more upside for income-focused investors? Let’s dive in.
Lamar’s Rising Cash Flow Supports Its Dividend
Baton Rouge, Louisiana-based Lamar Advertising, worth about $15.31 billion, owns and operates billboard, digital-display, transit, airport, and logo-sign advertising assets across the U.S. and Canada. Its portfolio gives advertisers access to large-scale local and national out-of-home audiences.
LAMR closed at $150.76 on Sept. 7, up 19.10% year-to-date (YTD) and 17.77% over the past 52 weeks.
www.barchart.com At that price, the stock traded at 17.61x trailing earnings, below the sector median of 29.62x. Its 16.61x price-to-cash-flow multiple, however, was above the sector median of 13.34x.
That share-price gain has been supported by improving results and a higher cash distribution.
Lamar’s latest dividend increase adds $0.05 to its quarterly payment, taking the payout to $1.65 per share from $1.60. That is a 3.1% increase and brings the annualized dividend to $6.60 per share, equal to a 4.4% forward yield. The company has also lifted its dividend 158% over the past five years.
Released on Aug. 6, the company’s second-quarter results help explain the basis for the dividend increase. Net revenue climbed 6.5% YoY to $616.7 million, while operating income rose $10.3 million to $208.0 million. Meanwhile, net income increased $9.6M to $164.6 million, and diluted EPS grew to $1.58 from $1.52.
Those earnings gains translated into stronger cash generation. Adjusted EBITDA increased 9.0% to $303.4 million, outpacing revenue growth. Cash flow from operating activities rose $22.9 million to $252.4 million, while free cash flow increased $19.6 million to $218.7 million.
For a REIT, Adjusted Funds From Operations, or AFFO, provides a more useful measure of recurring cash available for dividends. Lamar’s AFFO grew 10.1% to $247.9M from $225.3M in the year-ago quarter. Diluted AFFO per share rose 8.1% to $2.40 from $2.22, outpacing the company’s 3.1% dividend increase and providing additional support for the higher payout.
Lamar had $720.2 million of available liquidity at June 30, including $652.2 million of unused borrowing capacity under its revolving credit facility and $68.0 million of cash.
Lamar Is Building Its Billboard Network
Lamar added to its Louisiana footprint on Aug. 12 by acquiring the assets of AdSource Outdoor Advertising. The transaction brought more than 230 billboard faces into Lamar’s portfolio, including 30 digital displays.
This completed transaction also marked only the second UPREIT deal in the billboard industry. That structure allowed AdSource to contribute its assets to Lamar Advertising Limited Partnership, or Lamar LP.
Lamar LP holds the company’s operating assets. In return for their contributed assets, AdSource’s owners received common units in Lamar LP. Each unit is designed to track the value of one Lamar Class A common share.
For Lamar, the UPREIT structure provides a way to acquire advertising assets without paying entirely in cash. It can preserve capital for other investments or debt management. The added inventory, especially the 30 digital displays, could broaden revenue capacity and support future AFFO growth.
However, investors should note that Lamar did not disclose the deal price or expected financial contribution. That leaves outsiders unable to calculate an acquisition multiple or determine whether the transaction will immediately add to AFFO per share.
Lamar has also used cash to expand its portfolio. Earlier in 2026, the company acquired Cleveland Outdoor Advertising’s assets, adding 31 high-profile bulletin faces and more than 40 junior bulletin faces to its Cleveland market inventory.
Taken together, the acquisitions show Lamar using different transaction structures to expand its advertising network. Both could strengthen Lamar’s long-term revenue base, but their value to dividend investors will depend on how much incremental AFFO they generate.
Analysts See Modest Upside
Lamar will report third-quarter results on Nov. 5. For the September quarter, analysts expect EPS of $2.26, up 2.73% from $2.20 in the year-ago period.
The estimate follows Lamar’s stronger second-quarter results and revised 2026 outlook. Management now expects full-year diluted EPS of $5.95 to $5.99. It also forecasts diluted AFFO per share of $8.75 to $8.90, representing about 7% growth at the midpoint from 2025. That updated AFFO range was $0.22 higher at the midpoint than its earlier outlook.
Wall Street, however, has not become outright bullish on LAMR stock. The consensus view among seven covering analysts is “Hold.” Their average $162.17 price target implies approximately 8% upside.
Conclusion
Lamar’s higher dividend looks supported by rising AFFO, healthy free cash flow, and a growing portfolio of advertising assets. Its digital displays and recent acquisitions could add more revenue capacity over time. The stock may continue moving higher if advertising demand stays firm and new assets lift per-share cash flow. Still, investors should watch the next earnings report for proof that dividend coverage remains strong.
www.barchart.com On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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