3 Interesting Dividend Publishers

Published Wed, 20 Feb 2013 11:30 CET by TopYields.nl


In the recent years, the publishing sector has started to show modest growth. The global publishing market which was around $244.4B in 2011 is expected to reach $273B levels in 2016, an increase of 11.7% in 5 years (source: datamonitor.com). The industry comprises of traditional print media like books, magazines etc. and the printing business, which is basically physical production of media. The sector has good operating profit margins but the net profit margin is dented due to interest burden of relatively high leverage. The internet boom has forced companies to diversify into electronic printing and other media to adapt and survive. Expected moderate growth in the US economy over the next few years is likely to have a positive rub-off effect on this macro-sensitive industry. Consequently, there are several companies from this sector listed in the US stock markets which are expected to post good growth and also provide steady income to investors in the form of dividends. Some of the fundamentally more balanced stocks are discussed below.

Publishing Companies Dividend Table
Thomson Reuters (NYSE: TRI) is a provider of information to the world’s businesses and professionals. The company caters to the financial & risk, legal, tax & accounting and intellectual property & science segments of the information market. The revenue of the company has remained steady since 2009 ($12.948B) but the net income has grown significantly from $821M in 2009. The dividend has grown from $1.12 in 2009 to $1.28 in 2012 (yield 4.25%) indicating modest growth. The P/E is 12.3 and the price to book ratio (P/B) is a modest 1.47. The debt to equity ratio (D/E) is around 42 and the net profit margin is a healthy 15.97%. TRI has been paying quarterly dividends continuously since 1989 and the payout ratio is 51%. PEG (5 years estimate) of more than 6% and a trailing average dividend yield of 3.9% makes it a very good overall package of capital appreciation and dividend growth.

Thomson Reuters Stock Report

Pearson (ADR) (NYSE: PSO) is an international media and education company with operations in education, business information and consumer publishing markets. The group comprises of Pearson Education, The FT Group (finance and business information) and The Penguin Group (books and novels). The revenue and net income have grown dramatically from $5.14B and $376M in 2009. The P/E is just above 10 and the P/B is a healthy 1.61. Dividend has grown from $0.35 in 2009 to $0.65 in 2012 (3.75% yield). The PEG estimate is 2.5% and the trailing 5 year dividend yield is 2.7%. Pearson has been paying dividends since 2003 and the amount has grown every year since then. A low D/E ratio and high net profit margin coupled with a payout ratio of 35% makes Pearson a good long term bet.

Reed Elsevier (NYSE: ENL) is a provider of professional information solutions. The company is into providing solutions in the scientific, technical, medical, risk, analytics, legal, tax, regulatory and business information segments. Majority of the revenue of this geographically diversified company comes from the North American market. P/E ratio is around 15 but the price to book is very high at 6.46. Reed Elsevier has been paying dividends continuously since 2006 but the revenues have held steady between 2009-2011. The expected PEG is a modest 2.44%. The dividend yield of 3.78% will be difficult to maintain due to the recent increase in price from ~$22 to ~$30 levels. The trailing 5 year average yield is 3.1% and the payout ratio is 65%.

Considering the expected future growth of the sector and the dividend payouts, Thomson Reuters looks promising, based on its earnings growth potential and its time tested performance of paying steady dividends.


Stock name Dividend Yield
Pearson 7.35
Pearson 6.91
Thomson Reuters 3.30
Thomson Reuters 3.25
Relx 2.22
Reed Elsevier 2.18

Articles featuring Pearson (PSO):

Beware Of Dividend Traps In The Rush For Large-Cap Safety

The vote to leave the European Union has left investors facing huge uncertainty. But one clear trend in all this confusion has been the strength of large-cap stocks with broad international exposure. Big, well-financed companies that are cushioned from domestic economic gloom are precisely the types of equities that you might expect to do well in this environment. But not all large-caps are bulletproof, and general worries about possible dividend cuts mean that it's worth treading carefully... Read more

Pearson: Safe Dividend With A Call Option On The Turnaround

Introduction Over the past few years, Pearson (NYSE: PSO) has been shifting away from its existence as a global diversified media conglomerate. Under the leadership of Sydney Taurel, the company is narrowing its entire focus towards education services. The restructuring costs that come along, combined with cyclical adversity, have put pressure on earnings. However, by focusing the company in direction of long-term growth markets, future growth prospects are stronger than they have been in a... Read more

Will Dividend Stocks Save You In A Bear Market?

Myth Busters -- Dividend Stocks Are Safe In recent years, many investors have been attracted to the "safety" and "wealth-building" appeal of dividend stocks. Therefore, it is prudent to examine history and ask: Will my net worth take a big hit holding blue-chip dividend payers in the next bear market? Before we explore the facts, it is important to understand that well-intentioned investors have a habit of repeating the same mistakes over and over again. If we... Read more

Credit Suisse's Top UK, European And U.S. Dividend Stocks

Credit Suisse believes that dividend stocks are set for a period of outperformance according to a research note issued by the bank this week and reviewed by ValueWalk.To capitalize on this trend, the bank prefers dividend stocks which support both an attractive yield and room for payout growth over high dividend plays. Credit Suisse also prefers dividend aristocrats (stocks that have increased dividends every year over a certain period of time (10 years in Europe and 20 years in the US))... Read more

Fresh New Ideas From The U.K. For Dividend Growth Investors

The United Kingdom is a well regulated and developed economy with numerous companies that pay consistent and generous dividends. In this article, I introduce some lesser known small and mid-cap dividend growth stocks from the UK. The current yield may not be attractive to income focused investors as the market is probably rewarding these growth+income stocks with a fairly rich P/E multiple. I want to remind fellow SA investors that the UK does not withhold tax on dividends for US residents.... Read more