Media stocks have gotten beaten up so much this year that you’d think some speculators would start buying them just for the dividend yields. After all, when the stock price falls, the dividend yield goes up. Of course, if you buy it and then the price falls some more, then that even bigger yield isn’t very comforting. So, the trick is to call the bottom and grab the big yield at the lowest possible price. Hey, we didn’t say this was going to be easy.
Just before Thanksgiving, radio group owner Entercom’s yield was 8.8%. Since it began paying a quarterly dividend Entercom has had one of the highest yields in radio, but that hasn’t saved its stock from being dragged down with the rest of the sector.
Just what is the yield at Citadel? We don’t know, since the company hasn’t stated a dividend policy since acquiring ABC Radio. Bear Stearns analyst Victor Miller estimates it will be about 29 cents per share, which is around a 13% yield at recent stock prices.
TV owner Sinclair Broadcast Group has a yield of 5.7%, even with the promise of 2008 political revenues ahead.
Newspaper stocks are really out of favor on Wall Street, with ad revenues, particularly classifieds, falling in the face of the Internet. Thus, the New York Times Company pays a yield of 5.1% and Gannett 4.3%. Both have broadcast assets, but are overwhelmingly dependent on print.
Even CBS Corporation, which would hardly fit anyone’s definition of a speculative stock, is paying a dividend yield of 3.8%.
Will high dividends do anything to draw investors back to media stocks? So far, the answer appears to be no.