The board of directors of
) recently hiked the company's quarterly cash dividend by
approximately 10% to 27.5 cents per share on class A and class B
stock. The increased dividend will be paid on July 2, 2012 to
shareholders of record as of June 15, 2012. The current dividend
yield is 2.12%.
The recent hike in the dividend marks the company's second
dividend increase since it initiated dividend payment. Last year,
the company increased its dividend from 15 cents to 25 cents.
Viacom possesses a strong balance sheet with $1.14 billion of
cash and marketable securities. The excess cash available with the
company will be utilized to repurchase shares or to pay dividends
to its shareholders.
The nearest rivals of Viacom,
Time Warner Inc.
), pay quarterly dividends of 8.5 cents and 26 cents with dividend
yields of 1.77% and 3.02%, respectively. These, however, are below
the dividend paid by Viacom.
Viacom reported excellent financial results for the second
quarter of 2012. Net income from continuing operations in the
quarter was $588 million or $1.08 per share compared with $376
million or 63 cents per share in the comparable prior-year quarter.
Adjusted EPS of 98 cents was also above the Zacks Consensus
Estimate of 90 cents.
We believe that Viacom is well positioned for long-term growth
as it continues to benefit from its predominately cable
networks-based business model, strong affiliate fee revenue growth,
continuous hit movie releases, strong share repurchase plan,
multi-platform content, and is one of the fastest growing
traditional ad media.
However, stiff competition from other media companies along with
a slow economic recovery may act as headwinds for the stock going
forward. We, thus, maintain our long-term Neutral recommendation on
Currently, Viacom has a Zacks #3 Rank, implying a short-term
Hold rating on the stock.
NEWS CORP INC-A (NWSA): Free Stock Analysis
TIME WARNER INC (TWX): Free Stock Analysis
VIACOM INC-B (VIAB): Free Stock Analysis Report
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