Meredith Corporation (MDP): 23 Straight Years of Dividend Growth and a High Yield

Conclusion

For investors seeking safe current income with moderate growth, Meredith Corporation (NYSE:MDP) seems like a reasonable bet so long as its publishing assets do not begin to rapidly deteriorate and its retransmission fees continue rising.

There is some risk with how management decides to allocate capital (4) (e.g. a large acquisition to improve scale and negotiating power with cable companies), but the team has been disciplined and conservative historically. That will likely continue.

The company’s days of double-digit dividend growth are likely over given the rise in its payout ratios and slow-growth print publishing operations, but dividend raises have plenty of ability to continue at a pace in excess of the rate of inflation.

Overall, Meredith is a time-tested company that is navigating the challenges of an evolving media landscape while straddling two different lines of business (TV stations and publishing) that could realistically use more scale to better compete.

I personally prefer to invest in companies (5) with a clearer long-term outlook and more concrete opportunities for sustainable growth.

However, yield-hungry investors (6) could still give the business a look for its safe payout and modest valuation. There are worse ways to achieve a near 4% yield with decent income growth prospects.

Additional Links:

(1) http://www.simplysafedividends.com/blue-chip-dividend-stocks/

(2) http://www.ibtimes.com/how-high-can-cable-bills-go-tv-broadcasters-blasted-over-soaring-retransmission-fees-1988662