In order to boost shareholders return, leading lifestyle media
Scripps Networks Interactive Inc.
), has raised its share buyback plan by $1 billion. Last year,
the company executed a $1 billion share buyback plan, out of
which nearly $647 million is pending.
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In keeping with its share repurchase plan, Scripps Networks also
hiked its quarterly dividend rate by 5 cents or 33.3% per share
to 20 cents per share. The newly raised dividend will be paid on
Mar 10, 2014 to the stockholders of record at the close of
business on Feb 28, 2014.
Scripps Networks has been paying dividends uninterruptedly for
the last 20 quarters with continuous increase in dividends over
the period. The current dividend yield is 1.03%.
In the last quarter of 2013,
Time Warner Inc.
), belonging to the same industry, paid quarterly dividends of 12
cents, 28 cents and 30 cents with dividend yields of 0.7%, 1.8%
and 1.4%, respectively. Hence, Scripps Networks' dividend yield
is clearly the second lowest as compared to these companies.
Scripps Networks exited the third quarter of fiscal 2013 with
$556.6 million of cash & marketable securities and a lower
debt-to-capitalization ratio of 0.38. A healthy cash position has
allowed the company to drive earnings as well as shareholders
wealth by means of buying back shares and increasing dividend
On the flipside, we believe that such an aggressive stock buyback
plan coupled with higher dividends payments may exert pressure on
Scripps Networks' cash flow going forward.
Scripps Networks currently has a Zacks Rank #3 (Hold).