Gannett split should pay in 2015

Article Excerpt

In August 2014, Gannett announced it would split into two companies. One will focus on newspapers and their associated websites, and the other will hold its TV stations and stand-alone websites. The stock is down 14% since the spinoff announcement, mainly because investors are worried about falling advertising revenue. Still, studies have shown that after the first few months, spinoffs tend to outperform groups of comparable stocks for several years. That’s mainly because companies will only take on the costs of a spinoff when they have reason to believe it will boost the value of both the new and remaining businesses. GANNETT CO., INC. $30 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 225.8 million; Market cap: $6.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.7%; TSINetwork Rating: Average; www.gannett.com) is the largest newspaper publisher in the U.S., with 82 dailies, including USAToday, its flagship paper. The company offers subscribers in 35 markets a special rate if they…