If investors are looking for a stable dividend stock with upside, Meredith Corporation (NYSE:MDP) could be one that fits the bill. The stock currently provides a dividend yield of 4.09% for the Services company. Sell-side analysts covering the shares are projecting that it will reach $55.50 within the next 12-18 months. This is a solid upside to a recent tick of $48.10. On a consensus basis, analysts have a Buy/Sell rating of 2.80, which is based on a 1 to 5 scale where 1 represents a Strong Buy and 5 a Strong Sell.
A dividend is used when a company’s board of directors issue a portion of the company’s earnings to its shareholders. These dividends can be in the form of a cash payout, as stock shares, or as other property. The dividend rate can be quoted as a percent of the current market price, known as the dividend yield, or quoted in terms of the dollar amount each share gets, called dividends per share or DPS.
Profits of a company can be distributed to their shareholders by a dividend, or can be kept as retained earnings within the company. The company might choose to use their net profits and buy back their own shares out in the markets as a share buyback. Dividends and share buy-backs don’t change the value of a company’s shares. Dividend payments are approved by shareholders and could be structured as a one-time dividend, or as a cash flow to investors and owners.
High-growth companies such start-ups like those in the technology or biotechnology sectors usually don’t offer dividends because they need to use all of their profits reinvested back into the company in order to sustain the higher-than-average growth that they need. More established companies will issue regular dividends because they want to maximize shareholder wealth. Companies in the sectors of oil and gas, basic materials, healthcare and pharmaceuticals, banks and financial, utilities, and REITS tend to issue dividends more than other sectors.
Let’s take a look at how the stock has been performing recently. Over the past twelve months, Meredith Corporation (NYSE:MDP)’s stock was 15.53%. Over the last week of the month, it was -4.79%, -13.36% over the last quarter, and 2.61% for the past six months.
Over the past 50 days, Meredith Corporation stock’s -12.75% off of the high and -0.33% removed from the low. Their 52-Week High and Low are noted here. -15.61% (High), 41.61%, (Low).
Fundamental analysis examines the financial elements of a company, for example; sales, cash flow, profit and balance sheet. These numbers are then crunched to create theoretical valuations of companies.
Earnings Per Share (EPS) is the earnings made by a company divided by their number of shares. EPS enables the earnings of a company to easily be compared to their competitors. The higher the number, the more profit per dollar is being made on investor capital. Meredith Corporation’s EPS for the trailing 12 months is 0.72. Their EPS should be compared to other companies in the Services sector.
Price-to-Earnings Ratio is the current share price divided by annual earnings per share. P/E provides a number that details how many years of earnings it will take a stock to recoup the value of one share at current price levels. Easy to calculate and understand, P/E is an extremely common ratio that is used to compare valuations of stocks against each other relatively. Meredith Corporation’s P/E ratio is 67.76.
Projected Earnings Growth (PEG) is a forward looking ratio based on anticipated earnings growth. PEG is created by dividing P/E by the projected rate of earnings growth. Meredith Corporation’s PEG is 13.55.
Technical analysts have little regard for the value of a company. They use historic price data to observe stock price patterns to predict the direction of that price going forward. Analysts use common formulas and ratios to accomplish this.
Meredith Corporation (NYSE:MDP)’s RSI (Relative Strength Index) is 25.42. RSI is a technical indicator of price momentum, comparing the size of recent gains to the size of recent losses and establishes oversold and overbought positions.