2 Dividend Stocks Crushing the S&P 500 in 2026 That Still Yield Over 3.5%

Lamar Advertising (NASDAQ: LAMR) and Outfront Media (NYSE: OUT) are the two largest publicly traded billboard real estate investment trusts (REITs). Lamar operates more than 359,000 advertising displays in 45 U.S. states and Canada. Outfront operates a total of 552,877 advertising displays in the United States and Canada, with most of them being transit displays on subways, buses, and commuter rail stations, though it also has 38,240 billboards.

Both companies are seeing increased revenue from digital billboard advertising. So far this year, Lamar's shares are up more than 24%, while Outfront's stock has jumped more than 37%. The use of digital billboards has transformed the business. Lamar and Outfront are fundamentally real estate companies operating in vertical land. When they convert a traditional static vinyl billboard into a digital billboard, the economics change dramatically.

Instead of renting a billboard or sign to one advertiser for a month, a digital board can rotate eight to 10 distinct advertisers every few seconds. Because companies don't have to pay a crew to physically drive out and paste new vinyl sheets, the incremental cost of adding a new digital ad is virtually zero.

Here are three reasons to buy each stock right now.

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Steady, high-yielding dividends

Since raising its quarterly dividend from $0.10 to $0.30 per share in 2022, Outfront Media has kept its dividend the same, and it is now yielding around 3.6% at its current share price. The company's adjusted funds from operations (AFFO) payout ratio is 88%, well within the safety guidelines for a REIT.

Lamar Advertising pays a quarterly dividend of $1.60 per share, yielding around 4.03% at its current share price. Its AFFO payout ratio of 93% is high, but since the company is estimating yearly AFFO per share between $8.50 and $8.70, that payout ratio will drop to 74.4% at the midpoint.

A resilient local customer base

Both companies are somewhat insulated from the volatile swings of national advertising budgets because most of their tenants are local businesses. Outfront Media's clients are about 60% local businesses, while Lamar Advertising said that roughly 80% of its tenants are local businesses, such as local personal injury lawyers, restaurants, realtors, and hospitals.

National advertisers enjoy a wide range of advertising options, but local businesses do not. Traditional local media such as radio, print, and linear TV are shrinking due to declining audiences. Meanwhile, changes at big tech companies have made it harder for digital advertisers to access mobile location data, limiting geotargeting capabilities.

These business owners view their neighborhood billboards as essential tollbooths on major commuter routes. This hyper-local demand provides an incredibly steady, sticky stream of cash flow that standard digital advertising companies can't copy.

With the highly contested 2026 U.S. midterm elections approaching, political ad spending is projected to exceed $11 billion, according to AdImpact.

Dependable growth for both

Lamar reported revenue of $528 million in the first quarter, up 4.5% year over year, while free cash flow rose 15.3% from the same quarter a year ago to $152.4 million. AFFO per share was $1.72, up 7.5% year over year.

Outfront reported revenue of $429.6 million in Q1, up 9.9% year over year, while free cash flow was $75.3 million, an increase of 124% over the same period a year ago. AFFO per share was $0.34, up 143% year over year.

The top stock isn't clear-cut

Outfront has a greater debt load that eats into its free cash flow, and it is more exposed to the vagaries of national ad spending.

However, between the two stocks, Outfront shows greater revenue growth. It also shows triple-digit growth in free cash flow and adjusted funds from operations. After its share run-up this year, it trades at only a slightly higher trailing price-to-earnings ratio than Lamar, and it appears to be worth that valuation.

James Halley has no position in any of the stocks mentioned. The Motley Fool recommends Outfront Media. The Motley Fool has a disclosure policy.