Looking Into Lamar Advertising's Return On Invested Capital

Looking Into Lamar Advertising's Return On Invested Capital

According to Benzinga Pro, during Q4, Lamar Advertising LAMR earned $123.31 million, a 15.42% increase from the preceding quarter. Lamar Advertising also posted a total of $494.57 million in sales, a 3.71% increase since Q3. In Q3, Lamar Advertising earned $106.84 million, and total sales reached $476.89 million.

Why Is ROIC Significant?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q4, Lamar Advertising posted an ROIC of 3.27%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q4, Lamar Advertising posted an ROIC of 3.27%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

For Lamar Advertising, the positive return on invested capital ratio of 3.27% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Analyst Predictions

Lamar Advertising reported Q4 earnings per share at $1.21/share, which beat analyst predictions of $1.18/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

Posted In: BZI-ROCEEarnings