Viacom (VIA-B) Looks to Return More Value to Shareholders in 2010 - Barron's (DIS, CBS, SNI, More...)
Tweet
Share
E-mailGet Alerts VIA-B Hot Sheet
Join SI Premium – FREE
Viacom (NYSE: VIA-B) is reviving a classic as they revive their profits, according to a recent Barron's article. Betty White is slated to star in a new TV Land situational sitcom, Hot in Cleveland. White is the tip of the peak when it comes to Viacom having a resurgence of sorts.
To that end, the company could use a face lift. After owner Sumner Redstone was forced to sell a substantial portion of his holdings in CBS (NYSE: CBS) to meet the debt obligations of National Amusements holding company in late-2008, Viacom ended 2009 in much better shape than where it began.
On the balance sheet, Viacom has improved free cash flow 17% to $2 billion, bolstered by MTV and BET making big comebacks. Additionally, their movie studio has streamlined many operations and has seen a string of blockbuster hits recently.
Senior management is also foregoing M&A in order to return some value back to shareholders, either with a dividend or share-repurchase program.
Investors in-the-know have been attracted to the stock because they believes that its shares remain sharply undervalued, belying its array of well-known cable-network brands, powerful cash flow, earnings-growth potential and the possibility of a share buyback and/or perhaps a dividend payout, and operational stability.
Additionally, the stock remains cheap compared to its peers. Its has trailed the PowerShares Dynamic Media (NYSE: PBS) fund in terms of performance over the past year.
Consensus calls for a FY10 EPS of $2.97, but those estimates may still be low given the strong climate for movies, better advertising, and a stock buyback.
FY11 EPS estimates call for $3.11, giving VIA-B a P/E of 10.6x, cheaper than others in the industry including Walt Disney (NYSE: DIS), News Corp. (NASDAQ: NWSA), Time Warner (NYSE: TWX), Discovery Networks (NASDAQ: DISCA), and Scripps Networks (NYSE: SNI).
Some bulls on the stock see a price of $40 in 12-months.
Additionally, Barron's thinks that Viacom might be a takeover target upon the exit of Sumner Redstone. The company has a market value of $20 billion and attractive assets. News Corp. might be a prime bidder for the company, as would Comcast (NASDAQ: CMCSA), and Time Warner.
Redstone will be leaving his National Amusements stock to his kids, however, which may make things a bit more challenging.
53% of Viacom's revs come from advertising, a market that's surely picking up upon an economic recovery. 37% is from cable-affiliate fees.
To that end, the company could use a face lift. After owner Sumner Redstone was forced to sell a substantial portion of his holdings in CBS (NYSE: CBS) to meet the debt obligations of National Amusements holding company in late-2008, Viacom ended 2009 in much better shape than where it began.
On the balance sheet, Viacom has improved free cash flow 17% to $2 billion, bolstered by MTV and BET making big comebacks. Additionally, their movie studio has streamlined many operations and has seen a string of blockbuster hits recently.
Senior management is also foregoing M&A in order to return some value back to shareholders, either with a dividend or share-repurchase program.
Investors in-the-know have been attracted to the stock because they believes that its shares remain sharply undervalued, belying its array of well-known cable-network brands, powerful cash flow, earnings-growth potential and the possibility of a share buyback and/or perhaps a dividend payout, and operational stability.
Additionally, the stock remains cheap compared to its peers. Its has trailed the PowerShares Dynamic Media (NYSE: PBS) fund in terms of performance over the past year.
Consensus calls for a FY10 EPS of $2.97, but those estimates may still be low given the strong climate for movies, better advertising, and a stock buyback.
FY11 EPS estimates call for $3.11, giving VIA-B a P/E of 10.6x, cheaper than others in the industry including Walt Disney (NYSE: DIS), News Corp. (NASDAQ: NWSA), Time Warner (NYSE: TWX), Discovery Networks (NASDAQ: DISCA), and Scripps Networks (NYSE: SNI).
Some bulls on the stock see a price of $40 in 12-months.
Additionally, Barron's thinks that Viacom might be a takeover target upon the exit of Sumner Redstone. The company has a market value of $20 billion and attractive assets. News Corp. might be a prime bidder for the company, as would Comcast (NASDAQ: CMCSA), and Time Warner.
Redstone will be leaving his National Amusements stock to his kids, however, which may make things a bit more challenging.
53% of Viacom's revs come from advertising, a market that's surely picking up upon an economic recovery. 37% is from cable-affiliate fees.
You May Also Be Interested In
- USCB Financial Holdings (USCB) Reports Q1, Announces 500K Share Buyback
- Synchrony Financial (SYF) Reports Q1, Announces $1B Share Buyback
- Rimini Street (RMNI) Appoints Steve Hershkowitz as Chief Revenue Officer
Create E-mail Alert Related Categories
Insiders' BlogRelated Entities
UBS, Barron's, Dividend, Stock BuybackSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
