TORSTAR $1.64

TORSTAR $1.64 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $129.9 million; TSINetwork Rating: Average; Dividend yield: 15.9%; www.torstar.com) has invested a lot of time and money in the past decade or more looking for ways to cut its reliance on shrinking print ad revenue and to build a source of online profit.

This includes last year’s $178 million purchase of 56% of VerticalScope—a firm that operates 600 online forums and a variety of websites. Torstar also launched a digital version of The Toronto Star, its flagship newspaper, for tablet computers.

So far, the company has had little success, and continues to lose money. In the first quarter of 2016, it lost $0.40 a share, compared to a profit of $0.02 a year earlier. Revenue plunged 9.1%, to $174.8 million from $192.3 million.

A turnaround is still a possibility. The Toronto Star is a great brand name in Toronto and other areas, and VerticalScope has lots of room for growth. But a return to consistent profitability for Torstar is uncertain. Meanwhile, it will almost certainly cut its $0.26-a-share dividend, which yields a high 15.9%.

Torstar is now a hold.

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