The media sector has gained strength in the past four
In mid-May, the sector was a laggard -- No. 26 of 33 sectors.
As of Wednesday's IBD, the media sector was No. 3.
Within the radio and TV industry group,Sinclair Broadcast (
) is the only stock with a best-possible 99 in EPS Rating.
The Maryland-based company owns, programs or provides sales
services to 74 broadcast television stations in 45 states.
In August, the board of directors declared a quarterly
dividend of 15 cents a share, raising it from 12 cents.
The annualized yield is 5%.
The dividend, however, has a patchy history. In recessionary
2009, the company suspended the dividend. A special dividend of
43 cents a share was declared in November 2010. Quarterly
dividends were resumed in the first quarter of 2011.
Earnings leapt 89% and 61% in the past two quarters. Revenue
grew 23% and 34% in the same period. The Street expects earnings
to surge 42% in the current quarter on a revenue gain of 40%.
Acquisitions are partly responsible for the performance. In
April, Sinclair closed the acquisition of the broadcast assets of
Freedom Communications, which involved eight stations. The deal
gave Sinclair two more duopolies, one in West Palm Beach-Fort
Pierce, Fla. and another in Albany-Schenectady-Troy, N.Y.
A duopoly is when two companies own virtually all of the
market for a service.
Acquisitions continued in the current quarter.
In July, Sinclair agreed to buy Bay Television, which owns
WTTA-TV in Tampa, Fla. Also in July, Sinclair said it was buying
six TV stations from Newport Television. The stations are in
Ohio, Texas, Pennsylvania, Alabama, Florida and Kansas.
The deals are subject to FCC approval.
Another factor boosting Sinclair is the election season. Every
four years, political advertising spending is elevated because of
the presidential election.
The company's three- and five-year stability factor is 8 and
20, respectively. The scale runs from 0 (calm) to 99