Gannett Co., Inc. operates as a news and information company in the United States and the United Kingdom. It operates in two segments, Newspaper Publishing and Broadcasting.
Gannett Co is a dividend aristocrat as well as a component in S&P 500 index. Gannett has been increasing its dividends for the past 39 consecutive years. The next increase will be in July, based on the past several years.
The ROE has been in a steep downtrend from its 1998 highs at 25% to less than 11% in 2007. The decline in the newspaper business is the main driver behind the deterioration in fundamentals.
The dividend payout has remained below 35% during our study period. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings. Even with the small growth in earnings, it could take several years of positive dividend growth and flat earnings for this ratio to cross 50%. I think that GCI is attractively valued with its low price/earnings multiple of 6.50 and low DPR. The company also boasts an above average dividend yield at 5.50%.
Full Disclosure: I do not own GCI