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Meredith Enhances Shareholder Returns, Hikes Dividend

Nearly a week after reporting its second-quarter fiscal 2016 earnings results, Meredith CorporationMDP is back in the limelight with the announcement of a dividend hike. This Des Moines, IA-based company raised its quarterly dividend by 8.2% to 49.5 cents (or $1.98 annually). The increased dividend will be paid on Mar 15, 2016, to stockholders on record as of Feb 29. The dividend yield based on the new payout and the last closing market price is approximately 5%.

Last year in February, this leading media and marketing company in the U.S., with interests in publishing, broadcasting, integrated marketing and interactive media, announced a 6% increase in its regular quarterly dividend to 45.75 cents (or $1.83 annually).

Dividend hikes not only enhance shareholder returns, but also raise the market value of the stock. Through this strategy, companies persuade investors to either buy or hold the scrip instead of selling it.

Meredith, through its total shareholder return strategy, intends to boost shareholder value through dividend payouts, share repurchases and strategic investments in businesses to drive growth. The company has paid dividends for 69 successive years and raised them for 23 years in a row. Also, Meredith has $94 million remaining under its existing share repurchase authorization.

Meredith has consistently impressed investors with its earnings performance over the last nine quarters. The company reported second-quarter adjusted earnings per share of 80 cents that outpaced the Zacks Consensus Estimate of 77 cents. The better-than-expected results prompted management to provide an upbeat earnings outlook for fiscal 2016. This Zacks Rank #2 (Buy) company now expects earnings per share in the range of $3.05-$3.25 compared with $2.90-$3.25 guided earlier.

Additionally, the company put speculations to rest and announced the termination of the merger agreement with Media General, Inc. MEG after Nexstar Broadcasting Group, Inc. NXST proposed the acquisition of Media General for $4.6 billion - much higher than Meredith's bid of roughly $2.4 billion.

Another favorably ranked stock in the same industry is Time Inc. TIME , carrying a Zacks Rank #2.

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NEXSTAR BRDCSTG (NXST): Free Stock Analysis Report

MEDIA GENERAL (MEG): Free Stock Analysis Report

MEREDITH CORP (MDP): Free Stock Analysis Report

TIME INC (TIME): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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