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We have maintained our long-term Neutral recommendation on Meredith Corporation (MDP - Analyst Report) with a target price of $47.00.

Why the Reiteration?

Meredith boasts a strong portfolio of women’s magazines, which helps it secure its market share. This is evident from the company’s fourth-quarter fiscal 2013 results, wherein its earnings of 75 cents a share, surpassed the Zacks Consensus Estimate of 71 cents and increased 12% year over year.

The company remains focused on bolstering advertising revenues, primarily in the digital space and is laying more emphasis on brand licensing, marketing services and e-Commerce to make it less susceptible to economic downturns.

Meredith also remains a perfect bet for investors who are seeking both growth and income. The company through its TSR (Total Shareholder Return) strategy intends to boost shareholders’ value through dividends, share repurchases and strategic investments in business to drive growth.

The company has a strong history of making dividend payouts for 66 consecutive years. Over the last decade, the company has boosted its dividend at an average annualized rate of 16% and raised dividend annually for 20 straight years.

Moreover, the company constantly endeavors to explore and add alternative revenue generating channels through acquisitions or strategic alliances, which supplement its sales. Meredith extended its contract with Wal-Mart Stores Inc. (WMT - Analyst Report) through 2016, which includes an expansion of the Better Homes and Gardens branded home decor and garden program at Wal-Mart stores across the United States and Canada.

Alongside, this Zacks Rank #3 (Hold) stock renewed its long-term affiliation agreements with CBS Corporation (CBS - Analyst Report) and Fox Broadcasting Co. a division of Twenty-First Century Fox, Inc. . We believe these measures will help the company in reducing its dependency on traditional advertising and provide ample growth opportunities to increase its revenue generating capabilities, thereby driving profitability.

However, Meredith generates significant revenues from advertising, which makes it vulnerable to the changes in advertising demand. Moreover, secular headwinds remain a matter of concern for the company in the near term.

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