Viacom, Inc. (VIAB), Time Warner Inc. (TWX) & DirecTV (DTV): Media Companies Are Swallowing Shares

Page 1 of 2

Companies can reward owners with their earnings power in two ways: pay cash dividends, or repurchase shares. Over time, companies that have consistently and aggressively paid cash dividends and bought back stock returned more to investors than the market average.

Some industries are better stewards of owner earnings than other industries. Let’s look at some of the biggest media companies, and how they’re enriching shareholders.

Media buyback binge

These companies have not only repurchased more than 5% of outstanding shares in the past year, but they have plans to buyback even more of their existing stock:

Viacom, Inc. (NASDAQ:VIAB)

When it comes to cable, Viacom, Inc. (NASDAQ:VIAB) simply gets it. The company owns a variety of cable networks, from which it generates substantial monthly subscription fees. The company’s premier asset is its Nickelodeon network, which takes the cake for the largest child audience and consistently posts impressive ratings. Most of the company’s revenue comes from cable channels targeting a younger audience. Viacom, Inc. (NASDAQ:VIAB) also owns MTV and Comedy Central.

While Netflix, Inc. (NASDAQ:NFLX) and Amazon.com, Inc. (NASDAQ:AMZN) try to take the TV online, Viacom, Inc. (NASDAQ:VIAB) has a powerful position as a content creator.

Philippe Dauman is one of the most shareholder-friendly CEOs out there. In 2011, he laid out his plan, one which would return as much as $20 billion to shareholders in the form of dividends and repurchases. Viacom, Inc. (NASDAQ:VIAB) is delivering on that promise. As of January, the company had $3.3 billion remaining in its authorization. Since 2009, total diluted share count fell by nearly one-sixth from 608 million to 514 million shares.

Time Warner Inc. (NYSE:TWX)

One of the biggest names in media, Time Warner Inc. (NYSE:TWX) has a strong portfolio in the cable business with HBO, CNN, TBS, and TNT leading the charge for affiliate revenue.

Time Warner Inc. (NYSE:TWX)’s assets generate impressive earnings. The company owns Warner Bros., which gives it access to a large library of movies that can create residual income streams in licensing the rights to streaming companies, specifically Amazon.com, Inc. (NASDAQ:AMZN), which recently signed a deal to stream Warner Bros content in Europe.

Time Warner Inc. (NYSE:TWX)’s edge is in its globally-respected programming. CNN International is available in nearly 200 countries around the world. Cable without Time Warner programming would be a tough sell – Time Warner Inc. (NYSE:TWX) has pricing power.

Share count has dwindled as the company returns cash to owners. Total shares outstanding fell from 1.145 billion in 2010 to 960 million shares in 2013, after reporting that it had purchased 16 million shares between January 1 and April 26, 2013. The buybacks aren’t over yet. A new repurchase authorization replacing previous programs allows for the company to buy back $3.132 billion in common stock.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!