TEGNA INC. $29 (New York symbol TGNA; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 226.9 million; Market cap: $6.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.9%; TSINetwork Rating: Average; www.tegna.com) owns 46 TV stations, as well as websites that attract over 39 million unique visitors a month.
Gannett spun off its newspaper-publishing operations on June 29, 2015.
Investors received two shares of the new Gannett for each share they held. The rest of the company became Tegna. Investors only become liable for capital gains taxes when they sell.
Without spinoff-related costs but including the newspaper business, Tegna earned $150.2 million, or $0.65 a share, in its second quarter, which ended June 28, 2015. That’s down 2.9% from $154.6 million, or $0.67, a year earlier.
The decline mainly stems from a 19.6% drop in gross profits at the newspaper division. However, the broadcasting business’s earnings rose 2.1%, and Tegna recently acquired the 73% of the Cars.com website it didn’t already own. That boosted the digital division’s profits by 126.9%.
Revenue rose 4.2%, to $1.52 billion from $1.46 billion. As a separate firm, Tegna’s revenue was roughly $825 million.
The new Tegna will likely earn $1.75 a share in 2015, and the stock trades at 16.6 times that estimate. It pays a $0.56 dividend, which yields 1.9%.
Tegna is a buy.
