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Meredith (MDP) Hikes Dividend 4.8% Just Ahead of Q2 Earnings

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Meredith Corporation has to its credit a solid history of rewarding shareholders. It has been paying quarterly dividends for the last 71 years. Management has recently approved a quarterly dividend hike of 4.8% to 54.5 cents per share (or $2.18 annually). This marks the company’s 25th successive year of dividend hike. The increased dividend will be paid on Mar 15, 2018, to shareholders on record as of Feb 28. Notably, the hike reflects a yield of nearly 3.3% on the stock’s closing price on Jan 29.

Annually, the new dividend represents a hike of 10 cents per share from the prior payout. In January 2017, this Des Moines, IA-based company announced a 5.1% increase in its regular quarterly dividend to 52 cents per share (or $2.08 annually).

Dividend hike is frequent among companies with a stable cash position and healthy cash flows. We believe that such hikes not only enhance shareholders’ return but raise the market value of the stock as well. In fact, through these dividend increases companies persuade investors to either buy or hold the scrip instead of selling it.

Impressively, this Zacks Rank #3 (Hold) company maintains a shareholder-friendly policy through its total shareholder return (TSR) strategy. This, in turn, aids management to enhance shareholders’ value via share repurchases, dividends and strategic business investments to drive growth. Since the implementation of this strategy, more than five years ago, the company returned 22% on an average annual basis.

Apart from Meredith, companies like The Boeing Company (BA - Free Report) , The AES Corporation (AES - Free Report) and Amgen (AMGN - Free Report) have raised their respective dividend payouts of late. Boeing raised its quarterly dividend by 20 percent to $1.71 per share payable on Mar 2. AES Corporation has approved a quarterly dividend hike of 8.3% to 13 cents per share that is payable on Feb 15. Amgen hiked its quarterly dividend by 15% to $1.32 per share, payable on Mar 8.

Stock Performance

Following the news of dividend hike, shares of Meredith gained 1.3%. In the last three months, the stock has gained 26.4% compared with the industry’s growth of 23.8%. The company is slated to report its second-quarter fiscal 2018 results on Jan 31, 2018.



Management had earlier stated that Meredith’s second-quarter earnings are likely to be in the range of 87-92 cents a share, down from $1.30 reported in the prior-year quarter. Sharp decline in earnings projections for the quarter is primarily due to benefits of 54 cents registered in the year-ago period backed by robust political advertising revenues. Moreover, with the advancement of technology the print media is on a decline.

Nevertheless, the company’s strategic initiatives particularly in digital space, brand licensing activities and solid portfolio of television stations reinforce its position as one of the leading media and marketing companies.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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