Billboard REITs: In Your Face, But Under The Radar
For better or for worse, advertising billboards have become an unlikely symbol of "entrepreneurial Americana" and an inescapable fixture of the typical American commute.
In the era of highly-personalized advertising, Out-of-Home (OOH) advertising remains an attractive and cost-effective medium for mass-market and local advertisers, immune from ad-blockers and fast-forwarding.
Two Billboard REITs - Outfront and Lamar - control half of the country's 300,000 billboards. The conversion of static posters to digital displays will drive incremental revenue growth.
Don't even think about trying to build any new billboards, as barriers to entry are significant and supply growth is non-existent. Billboard ownership, however, is an operationally-intensive, low-margin business.
As growth-oriented REITs with hearty dividend yields and attractive valuations, billboard REITs are an under-the-radar REIT sector well-positioned for continued outperformance if the US economy continues to chug along.