World Wrestling Entertainment Inc.

This company uses compelling stories to brand its SuperStars and then uses the brand to boost television ratings, wrestle up more buyers for pay-per-view shows, increase ticket sales at live events and spark Internet traffic.

World Wrestling Entertainment Inc. (WWE) is a media and sports entertainment company headquartered in Stamford, Conn. with offices around the world, including in London, Shanghai, and Sydney. The company isn't just about a wrestling show on television anymore. It is a completely integrated entertainment company.

The company has four divisions: Live and Televised Entertainment, which consists of live events, the sale of merchandise at the events, television programming and pay-per-view, and video on demand programming; Consumer Products, which handles the sale of video games, toys, books and other consumer products through third party licensees; Digital Media, which handles the online advertising, ecommerce, broadband and mobile services; and WWE Films, which focuses on the production of feature films, direct-to-consumer films, as well as other film and television projects.

The company's strategy is to build the brand of its SuperStar performers and use the story of that brand to sell the product across all media platforms. WWE looks to take the intellectual property, the SuperStars, and leverage it for maximum profits.

WWE's strategy appears to be working as the company recently reported a blowout fourth quarter, surprising on analysts' estimates by 87.50%. Net income was $21.5 million, or 30 cents per share, as compared to $15.5 million, or 22 cents per share, in 2006. Analysts expected 14 cents per share for the quarter.

Revenue for the quarter increased by 23%, at $132.6 million compared to $107.6 million in 2006. The company also saw record revenue for the full year of $485 million.

WWE is in a growth phase as it pushes strongly into new international markets, such as Latin America and Asia. International growth was up 25% in the fourth quarter.

If the growth alone wasn't enough to make the company attractive, WWE is also sharing its cash with shareholders. On Feb 21, WWE announced it was boosting its dividend by 50% to all shareholders outside of the McMahon family.

The McMahon family, which founded the company 25 years ago, owns 70% of the company's stock. The quarterly dividend for all other shareholders will rise to 36 cents per share from 24 cents, but the McMahons will still see 24 cents per share. The hike puts the dividend yield at 7.40%.

WWE, a Zacks #1 Rank (Strong Buy), has surprised on estimates three of the last four quarters on average of 35.90%. It has a P/E of 20.72, under the industry average of 22.70. The company had a solid return on equity in 2007 of 13.63%.

Read the full analyst report on WWE