Sunday, April 27, 2014

Dividends & Income MDP the next 2014 Dividend Machine

The next 2014 Dividend Machine is Meredith Publishing, symbol MDP.   This post is a review of MDP’s Dividend Machine fundamentals. 

Meredith, MDP, is a publisher.   This stock is hovering between its 52 week high of $53.84 and low of $37.28.  MDP closed at $44.53 on Friday April 25, 2014.

MDP Dividend Machine Fundamentals:

Earnings regularly exceed dividend payout with the past four quarters EPS of $2.36 and dividends of $1.73.  In 2009, MDP did take a large charge against earnings when their EPS were less than the dividend paid.   However since then, earnings consistently outpace dividends.   MDP’s current dividend yield is 3.88%.   MDP’s next dividend should be declared about May 8 and paid about June 14.  Dividend increases have averaged over 18% per year over the past 5 years.  Debt to Equity ratio is a very manageable .39.  These fundamentals are presented in the table below.

This is the kind of stock where you have to trust the Dividend Machine strategy and not second guess your selection due to other factors.  What other factors?  Well, MDP is in the publishing business which one might consider a dying industry.   Meredith just announced that it will no longer publish The Ladies Home Journal as it has for a long, long time.  Now it will be distributed to newsstands on a quarterly basis.   Every paper published has fewer and fewer pages whether you read the New York Times, The Wall Street Journal or the New York Post.

Yet, a closer look at the Meredith specifically reveals a more modern business than meets the eye.  In their own words, today Meredith engages in not only magazine publishing.  It also owns related brand licensing, television broadcasting, digital and customer relationship marketing.  It operates two business segments:  national media and local media

Whenever I second guess my Dividend Machine strategy, I am usually sorry.   However, MDP is not exactly a momentum stock so you have time to digest Meredith’s Dividend Machine Fundamentals before you determine if MDP is a good fit for the income producing portion of your portfolio.