Dell Inc. (DELL), World Wrestling Entertainment, Inc. (WWE) – Inside Ownership: Should You Buy Or Sell?

It is clear that the McMahon family wants to maintain control of the company. As a large part of their wealth is tied up in company stock, and selling stock and diluting their ownership is not an option, they must find other ways to get money out of the company. World Wrestling Entertainment, Inc. (NYSE:WWE) has consistently paid a very strong dividend, and sports a current yield of 5.17%. While not explicit, this is clearly how the McMahon family is transferring wealth to their pockets without diluting their ownership. After all, it is the McMahon family who is setting dividend policy.

World Wrestling Entertainment, Inc. (NYSE:WWE) offers a great yield, if you are comfortable with the McMahon family exercising control over the company. The family’s need to maintain complete voting control will allow investors to reap the gains of a strong dividend yield and payout ratio.

Foolish Bottom Line

Inside ownership poses an interesting scenario for investors. In the case of Dell, Michael Dell’s ownership stake only served to undermine his attempt to take the company private. The issues surrounding the company will continue to create issues as the fate of Dell is played out in the public eye. Buying Dell now would be a gamble on the outcome of this debacle, not an investment.

If Dell is able to change its business model and do away with its personal computing segment, it may warrant a reevaluation as an investment opportunity. International Business Machines Corp. (NYSE:IBM) sold its personal computing business in 2005, and since then, the stock has increased at an annual rate of 13.08% from its highest closing price in 2005. The company remains an attractive investment opportunity at a current P/E of 14.10, below the S&P’s current P/E of approximately 18, and well below the industry average of 26.86.

World Wrestling Entertainment, Inc. (NYSE:WWE) offers an attractive opportunity for investors looking for a strong yield and a company that will continue to maintain a strong payout ratio. The company has a very loyal fan base and a globally recognized brand. While the company’s recent first quarter results were disappointing due to issues with its movie production segment, the company remains a strong investment opportunity.

The article Inside Ownership: Should You Buy Or Sell? originally appeared on Fool.com is written by John Timmes.

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