We have maintained our long-term Neutral recommendation on
) with a target price of $51.00.
Why the Reiteration?
Meredith boasts a strong portfolio of women's magazines, which
helps it secure market share.
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's most recent
attempt to enhance its television portfolio could be witnessed in
Dec 2013 when it entered into a deal to acquire television
stations in Phoenix and St. Louis from
Gannett Co., Inc.
) and Sander Media LLC.
The deal, which is expected to conclude in the first half of
calendar year 2014, is the latest among several strategic
acquisitions made by Meredith. The company had earlier added
Allrecipes.com; Every Day with Rachael Ray; FamilyFun;
EatingWell; Parenting and BabyTalk to its portfolio.
Meredith is also a perfect bet for investors 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.
This Zacks Rank #2 (Buy) company, through strategic alliances
leverages its brands, which supplement the sales of the company.
Meredith extended its contract with
Wal-Mart Stores Inc.
), which includes expanding Better Homes and Gardens branded home
decor and garden program at the latter's stores across the United
States and Canada.
We believe these measures will help the company reduce its
dependency on traditional advertising and provide ample growth
opportunities to increase its revenue generating capabilities,
thereby driving profitability.
However, we are cautious about the stock's prospects as
persisting macroeconomic headwinds and higher dependence on
traditional advertising revenue may subdue the company's
performance. Given the pros and cons of the stock, we reiterate
our Neutral recommendation.
Another Stock to Consider
However, another better-ranked stock in the publishing sector
) with a Zacks Rank #1 (Strong Buy).
GANNETT INC (GCI): Free Stock Analysis Report
MEREDITH CORP (MDP): Free Stock Analysis
TRIBUNE CO-A (TRBAA): Get Free Report
WAL-MART STORES (WMT): Free Stock Analysis
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