Viacom (VIAB) Shares See Pressure as Peer News Corp (NWSA) May Split Up
Tweet
Share
E-mailGet Alerts VIA-B Hot Sheet
Join SI Premium – FREE
Viacom, Inc. (Nasdaq: VIA-B)(NYSE: VIA) shares are trading lower Tuesday following confirmation from News Corp (Nasdaq: NWSA)(NYSE: NWS) the company is looking to restructure into two separately-traded public companies.
The split would be similar to that of Viacom, which spun-off CBS Corp. (NYSE: CBS) in 2006. Viacom's largest shareholder, Sumner Redstone, remained in control of both corporations following the split. Viacom shares are up about 14 percent since the start of 2006.
Separation would be into entertainment and publishing segments. News Corp's film, broadcast, and TV segments would fall into the entertainment category. Companies include 20th Century Fox, SPEED TV, and Fox Broadcasting.
For publishing, we're talking about Dow Jones, the WSJ, and the New York Post.
Viacom would compete with News Corp in television, with offerings like MTV, Comedy Central, and Spike. For film, Viacom owns Paramount Pictures. (Fun fact: Viacom also owns Jokes.com.)
Investors looking for a slim, trim, energetic media asset might opt for the new News Corp stock rather than Viacom. Both segments for Viacom are profitable, with its "Other" category (its websites) being the only unprofitable segment in 2011.
Cut out some of the clutter and News Corp would be an entertainment stock which has a similar market cap to Viacom's (in the mid-$20 billion range), less debt, and more drive due to News Corp getting 70 percent of revenue from television.
However, investors might stick with Viacom for its dividend. At $1.10 annually, the dividend yields 2.3 percent at current prices, compared with 0.8 percent at News Corp.
Viacom shares are down about 0.5 percent Tuesday.
The split would be similar to that of Viacom, which spun-off CBS Corp. (NYSE: CBS) in 2006. Viacom's largest shareholder, Sumner Redstone, remained in control of both corporations following the split. Viacom shares are up about 14 percent since the start of 2006.
Separation would be into entertainment and publishing segments. News Corp's film, broadcast, and TV segments would fall into the entertainment category. Companies include 20th Century Fox, SPEED TV, and Fox Broadcasting.
For publishing, we're talking about Dow Jones, the WSJ, and the New York Post.
Viacom would compete with News Corp in television, with offerings like MTV, Comedy Central, and Spike. For film, Viacom owns Paramount Pictures. (Fun fact: Viacom also owns Jokes.com.)
Investors looking for a slim, trim, energetic media asset might opt for the new News Corp stock rather than Viacom. Both segments for Viacom are profitable, with its "Other" category (its websites) being the only unprofitable segment in 2011.
Cut out some of the clutter and News Corp would be an entertainment stock which has a similar market cap to Viacom's (in the mid-$20 billion range), less debt, and more drive due to News Corp getting 70 percent of revenue from television.
However, investors might stick with Viacom for its dividend. At $1.10 annually, the dividend yields 2.3 percent at current prices, compared with 0.8 percent at News Corp.
Viacom shares are down about 0.5 percent Tuesday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- News Corp to Report Fiscal 2024 Third Quarter Earnings
- Franklin Financial Services Corporation (FRAF) Declares $0.32 Quarterly Dividend; 4.2% Yield
- Baker Hughes Company (BKR) Declares $0.21 Quarterly Dividend; 2.5% Yield
Create E-mail Alert Related Categories
Insiders' BlogRelated Entities
DividendSign 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!
