Scripps Raises Dividend - Analyst Blog
19 Febrero 2013 - 9:00AM
Zacks
The board of directors of
Scripps Networks Interactive Inc. (SNI) recently
announced a hike in the company’s quarterly cash dividend by 3
cents or 25% to 15 cents per share on its common stock. This will
translate into an annualized cash dividend of 60 cents per share.
The company will pay the dividend on Mar 8, 2013 to shareholders of
record at the close of business on Feb 28, 2013.
This is the company's third
dividend increase during the last two years. The company has been
paying dividends uninterruptedly for the last few years. The recent
hike will cost Scripps nearly $22.5 million each quarter, provided
it does not issue or repurchase any further shares thereby
resulting in a dividend yield of 0.97% as compared to 1.09% for the
industry. However, the market did not react positively to the news
as the stock price fell by 17 cents to close at $9.87 at the close
of trade on Friday.
Scripps has sufficient cash to
carry out this dividend hike program. The company exited the fourth
quarter of 2012 with $437.5 million of cash and marketable
securities on its balance sheet. During 2012, Scripps Networks
generated $614.7 million of cash from operations compared with
$728.9 million in 2011.
Scripps’ record of paying regular
dividend is far better than some of its rivals like LIN TV
Corp. (TVL) and Discovery Communications
Inc. (DISCA), which have not paid any regular dividends in
the last four years while Entravision Communication
Corp. (EVC) has only paid two cash dividends in the last
two years.
Recently, Scripps reported weak
financial results for the fourth quarter of 2012, which fell below
the Zacks Consensus Estimate. Quarterly adjusted earnings per share
of 84 cents were way below the Zacks Consensus Estimate of 91
cents. The company’s quarterly total revenue of $604.7 million also
fell short of the Zacks Consensus Estimate of $617 million.
We believe the company is raising
its regular dividend to match its payout ratio of 10.56% with that
of the industry average, which currently stands at 20.65%. However,
we remain apprehensive about the rising programming costs, which
will increase the cost of operations for Scripps. Increased
expenses might reduce the company’s bottom line, thus impacting its
returns to
shareholders.
Currently, Scripps Network carries
a Zacks Rank #3 (Hold).
DISCOVERY COM-A (DISCA): Free Stock Analysis Report
ENTRAVISION COM (EVC): Free Stock Analysis Report
SCRIPPS NETWRKS (SNI): Free Stock Analysis Report
LIN TV CORP -A (TVL): Free Stock Analysis Report
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