Critical Analysis: OUTFRONT Media (NYSE:OUT) and NNN REIT (NYSE:NNN)

OUTFRONT Media (NYSE:OUT) and NNN REIT (NYSE:NNN) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Insider & Institutional Ownership

90.0% of NNN REIT shares are owned by institutional investors. 0.5% of OUTFRONT Media shares are owned by insiders. Comparatively, 0.9% of NNN REIT shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

OUTFRONT Media pays an annual dividend of $1.20 per share and has a dividend yield of 3.8%. NNN REIT pays an annual dividend of $2.40 per share and has a dividend yield of 5.3%. OUTFRONT Media pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NNN REIT pays out 116.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NNN REIT has increased its dividend for 35 consecutive years. NNN REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for OUTFRONT Media and NNN REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OUTFRONT Media	0	1	6	0	2.86
NNN REIT	2	8	3	0	2.08

OUTFRONT Media currently has a consensus target price of $30.71, indicating a potential downside of 1.56%. NNN REIT has a consensus target price of $45.65, indicating a potential upside of 1.51%. Given NNN REIT’s higher probable upside, analysts clearly believe NNN REIT is more favorable than OUTFRONT Media.

Profitability

This table compares OUTFRONT Media and NNN REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OUTFRONT Media	9.98%	30.36%	3.57%
NNN REIT	41.38%	8.81%	4.14%

Risk and Volatility

OUTFRONT Media has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, NNN REIT has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Valuation and Earnings

This table compares OUTFRONT Media and NNN REIT”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OUTFRONT Media	$1.83 billion	3.00	$147.00 million	$1.05	29.71
NNN REIT	$926.21 million	9.24	$389.78 million	$2.06	21.83

NNN REIT has lower revenue, but higher earnings than OUTFRONT Media. NNN REIT is trading at a lower price-to-earnings ratio than OUTFRONT Media, indicating that it is currently the more affordable of the two stocks.

Summary

NNN REIT beats OUTFRONT Media on 10 of the 17 factors compared between the two stocks.

About OUTFRONT Media

OUTFRONT Media, Inc. leases advertising space on out-of-home advertising structures and sites. Its inventory consists of billboard displays, which are primarily located on the most heavily traveled highways & roadways, and transit advertising displays operated under exclusive multi-year contracts with municipalities in large cities across the U.S. and Canada. It operates through the U.S. Media and other segments. The U.S. Media segment includes U.S. Billboard and Transit. The company was founded in 1938 and is headquartered in New York, NY.

About NNN REIT

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years.