Gannett Co., Inc. (GCI), The New York Times Company (NYT): This Industry Isn’t Dead Yet

Another subsidiary that is currently on theThe New York Times Company (NYSE:NYT)’s chopping block is its New England Media Group — which includes the Boston Globe newspaper — as well as its allied properties. These divestitures should help the Times to “stop at least some of the bleeding” from underperforming business segments.

Although, while the company has made valiant efforts to stay in front of businesses and consumers with its media offerings, the share price has not performed well over the past year or so. With no dividend payout and a share price that is actually much above the peers’ average forward estimates of 12 times, investors may be wise to look to other companies for their media-related stock holdings.

Continuing the fire sale of non-performing assets

The Washington Post Company (NYSE:WPO), on the other hand, has brought in some favorable financial numbers of late. The company’s first-quarter 2013 adjusted earnings were up substantially from just one year ago — rising from $1.18 per share to nearly $3.50.

This company, along with its subsidiaries, operates as a media company as well as an education outlet, both in the U.S. and internationally. The wide range of education services that are provided by the Post include Kaplan Test Preparation and Kaplan Higher Education. The education arm of the company also includes 59 schools across 17 states.

The Post’s key strength comes from its television broadcasting and cable TV divisions, which helped push its revenue from $955.5 million in the first quarter of 2012 to over $959 million in the first quarter of 2013. On the other hand, lackluster performance in the newspaper publishing and education divisions continues.

Here again, due largely to economic factors, growth of the company’s publishing division has been impeded. In the hope of cutting its losses in this area, the Post recently completed the divestment of its daily and Sunday newspaper, The Herald, as well as its Sound Publishing subsidiary.

The shedding of the fat seems to have worked for the Post, and its investors are continuing to be well rewarded with a dividend payout of $9.80 per share — which equals out to a 2.20% annual dividend yield — and the share price is just below its 52-week high. Still, the company’s overall revenue continues to decline, and though recent aforementioned efforts have been somewhat fruitful, more needs to be done before The Washington Post Company (NYSE:WPO) can be taken as a real value investment.

The bottom line

In order to stay competitive, all three companies will need to continue divesting unprofitable and underperforming acquisitions and subsidiaries, and well as keeping a key focus on providing the types digital content that consumers and businesses are requesting.

Looking ahead, investors need to focus on both the strength and stability of these companies’ dividend payouts, as well as what is driving share price overall. In doing so, they may be able to find some real opportunity in an industry that is in the midst of great change.

The article This Industry Isn’t Dead Yet originally appeared on and is written by Nauman Aly.

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