Please ensure Javascript is enabled for purposes of website accessibility

Boston Omaha Showcases Billboard Acquisitions, Insurance Progress

By Steve Symington – May 13, 2019 at 6:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After a busy 2018, the surety insurance and billboard advertising leader started 2019 with a relatively quiet quarter.

Boston Omaha (BOC -0.33%) released first-quarter 2019 results on Friday after the market closed, showcasing an incredible acceleration in top-line growth fueled by both last year's billboard acquisitions and its recently expanded surety-insurance operations.

With shares down around 7.5% on Monday -- a move probably amplified by the broader market's decline today, given escalating trade tensions between the U.S. and China -- here's a closer inspection of what drove Boston Omaha as it kicked off the new year.

Empty illuminated billboard on a city highway

Image source: Getty Images.

Boston Omaha results: The raw numbers

Metric

 Q1 2019

Q1 2018

Year-Over-Year Growth

Revenue

$9.11 million

$2.82 million

216%

GAAP net income (loss) attributable to common shareholders

($4.08 million)

($2.07 million)

N/A

GAAP earnings (loss) per share

($0.18)

($0.13)

N/A

Data source: Boston Omaha Q1 2019 SEC filing. 

What happened with Boston Omaha this quarter?

  • Book value per share was $14.15 as of March 31, down from $14.27 per share at the end of last quarter, but up 10.6% from the same point a year ago.
  • The change in revenue consisted of: 
    • 337.4% growth from net billboard rentals, to $6.78 million, driven by billboard business acquisitions made between last July and August, as well as improvements in rental and occupancy rates for existing billboards.
    • A 294.4% increase in premiums earned, to $1.88 million, driven by higher gross written premiums with Boston Omaha's United Casualty and Surety Insurance Company (UCS) now licensed to write surety in all 50 states and the District of Columbia. Recall that UCS was only just admitted to write surety in California -- where parent General Indemnity Group writes more surety than anywhere else in the country -- in the fourth quarter of 2018.
    • A 53.6% decline in insurance commissions, to $0.355 million, as Boston Omaha's agents are now able to place more bond business through UCS, rather than through other carriers, thanks to its expanded licensed reach.
    • 206.8% growth from investments and other income, to $92,846, reflecting gains on certain UCS investments. 
  • Boston Omaha ended the quarter with $380.1 million in total assets, up from $332.2 million last quarter.
  • As of May 6, Link Media Outdoor operated roughly 2,900 billboards with 5,400 advertising faces -- or 5,900 counting digital face flips. 

What management had to say

Boston Omaha doesn't currently hold quarterly conference calls with investors, though the company has slated its 2019 annual shareholder meeting for June 8 in Boston.

But I'd be remiss if I didn't point investors toward Boston Omaha's 2018 annual letter to shareholders, released in March. In it, management quipped, "You're more likely to see the Patriots or Red Sox lose in the [Super Bowl] or World Series to a team from L.A. than to catch us making quarterly or annual earnings forecasts."

Rather, investors can rest assured Boston Omaha is continuing to keep its head down while maximizing cash generation, creating shareholder value, and setting the foundations for sustained, profitable growth for years to come. In the end, I think all signs in this quarterly report indicate that Boston Omaha continues to make steady progress toward those goals.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Boston Omaha. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Boston Omaha Corporation Stock Quote
Boston Omaha Corporation
BOC
$24.18 (-0.33%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.