Gannett Doubles Dividend as Profits Plunge
Gannett Co. announced today that the company will double their quarterly dividend to $.08 per share from its previous level of $.04.
The dividend increase will push the current yield on Gannett stock to 2.4 percent.
This marks the first dividend increase from Gannett since the newspaper company slashed their dividend by 90 percent in February 2009. Before the dividend cut, Gannett was paying a quarterly dividend of $.40 per share to investors.
In addition to the dividend increase, Gannett is also resuming their $1 billion stock repurchase program. This program was originally approved in 2006 and still has over $800 million remaining authority repurchase shares.
Craig A. Dubow, chairman and chief executive officer of Gannett, commented on the dividend announcement, “We are committed to creating value for our shareholders and believe our stock is an outstanding investment at current price levels. The actions taken today reflect our confidence in the company’s long term growth prospects, our ability to consistently generate substantial free cash flow and our strong financial position. At the same time, and equally as important, we will have the financial flexibility to continue to grow our businesses and invest in new opportunities.”
The dividend hike and stock repurchases are certainly a welcome signs, but things are not completely rosy at Gannett either. The company just reported a 22 percent decline in profits for the second quarter. A weak newspaper advertising environment is going to force GCI to cut another 700 jobs at the company’s papers.
Since the beginning of the year, Gannett stock has declined nearly 11 percent and has underperformed the S&P 500 index.
The increased Gannett dividend will be payable on October 3, 2011 to shareholders of record as of September 9, 2011.
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