Investing

Better High-Yield Passive Income Dividend Stocks: Lamar Advertising vs. Cheniere Energy Partners

Joel South

Published: April 17, 2024 2:41 pm

Finding well established and secure dividend stocks is a popular strategy to generate passive income to supplement income or re-invest and build truly lasting wealth. The challenge for investors is finding safe dividend paying stocks, particularly stocks with higher dividend yields. 

Companies with consistent track records of dividend payouts, stable cash flow and manageable debt are key factors in finding quality investments. 24/7 Wall Street ran the numbers comparing two quality dividend stocks, Lamar Advertising (NASDAQ: LAMR) and Cheniere Energy Partners (NYSE: CQP) to find which is king. 

Leader in Liquefied Natural Gas 

Cheniere Energy made a big name for itself as the first company to build a large scale liquified natural gas (LNG) terminal for exportation in the United States and currently is the leader in LNG production. Its flagship assets are LNG terminals in Sabine Pass and Corpus Christi along the Gulf Coast. 

Cheniere Energy Partners, is the parent company of Cheniere Energy and structured as a master limited partnership, meaning it is structured to pass profits back to investors through distributions (similar to dividend payments). 

The current yield on the distribution is 8.85% and the stock is up 8.4% over the past year. 

Display Advertising Still Strong After All This Time 

Lamar Advertising is by far the largest outdoor advertising assets company in the U.S. with over 350,000 billboards and displays lining roadways and public places throughout North America. The company makes money by owning and leasing physical billboards and digital displays to customers typically over long term contracts. Although the company has been in operation since 1902, its IPO was in 1996 and steadily increased its share price by 725%. 

Lamar Advertising sports a 4.7% dividend yield and stock is up 15% over the past 52 weeks.

Source: Jack_the_sparow / Shutterstock.com

Side by Side Comparison 

Passive income investors are looking for stocks with the highest earnings yields. That is a stock that pays out a nice dividend while also having the ability to grow its business and return more income. 

Lamar Advertising and Cheniere Energy Partners will go through a checklist looking at the following metrics:

1. Revenue growth higher than previous years.
2. Earnings growth higher than previous years.
3. Have dividend payments been missed.
4. Average long-term cash flow.
5. Long-term net debt.
6. 1 Year Wall Street price prediction
   

Data Sourced From Y-Charts 

Lamar Advertising is our winner for passive income investors with strong fundamental growth only detracted by a debt load that is 5 times great than its most recent earnings. While Wall Street has a positive outlook on the stock, but the consensus price target for the year is only 2.2% higher the the current price.

Meanwhile Cheniere Energy Partners is in better shape to paydown its long term debt but Wall Street analysts covering the stock are more bearish on the stocks future outlook.