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I've
been struggling with three ironies.
One: When the obituary for the American newspaper
industry is written, where will it be published?
Two: Will the publishers have the class to put out one
last great "extra" edition detailing exactly how they failed
to perceive the readership and advertising trends that their
own reporters have been writing about for the past ten
years?
Three: Will newspaper owners use their last dividend
checks to buy shares of companies that vanquished them? Will
they realize that they could have bought their executioners
instead of being edged out of their own industry and being
forced to stop the presses?
I don't know the answers to any of these questions. I do know that U.S. newspaper
industry is languishing; the Russell 2000 Publishing News Index has lost
an annualized
-24.5% since 2003.
But I like newspapers. In fact, my
great-grandfather once owned a newspaper in Budapest,
Hungary. I've worked at newspapers; I even met my wife at
one. And I remain among the dwindling number of people who
read their local newspaper -- on actual newsprint -- every
day.
Even though U.S. publishers are on the wane, I'm glad
that's
not true in the rest of the world. In 2007, the latest
year for which complete data is available, circulation in
India grew +11.2% -- even as U.S. circulation slid -3%. Newspapers, overall, are still a growing medium: 515 million
people buy one every day, up from 488 million in 2002.
I've been keeping my eye on a newspaper and media company in
Europe that's paying a sweetheart 10.2% dividend yield.
In the five years ending December 31, 2007, it has gained +26% annually,
with most of that return coming from compounded dividends. Hold onto your seat: That rate of return changed $1,000 into $3,200
in five years.
I recently shared the details of this company with subscribers of my
premium
High-Yield International
newsletter.
Here are four reasons I think this company is a winner:
Diversity. The company's portfolio comprises
more than 200 newspaper and magazine titles, 130 radio
stations and more than 75,000 billboards. These properties
aren't concentrated in one hot-growth pocket, either, they
span the globe and cover markets with a record of strong
growth and favorable economic forecasts.
Growth. This company owns a newspaper in India
that reaches an astonishing 53.6 million people. Advertisers
are eager to get their products in front of India's
burgeoning middle class, and newspaper publishers there are
seeing
profits rise +40% to +50% a year. This is a sustainable march
toward bigger and bigger bottom-line results.
Prospects. The company isn't ignoring the online
space. It
has an active digital presence, with more than 100 websites
worldwide. True, online advertising accounts for less than 5% of
total revenue, but that's simply a recipe for growth. The
company is well positioned to capture online ad revenue.
Cash. This is our favorite, right? This company
currently yielding 10.2%. But that could improve --
they've been growing their dividend +11.7% a year, on
average, for the past five years. I
expect that to continue in the coming years as
strong economic growth means increased ad revenues. Now,
"strong economic growth" might be a phrase U.S. investors
have forgotten, but this company's properties are in
countries where robust growth is still the norm. It's seeing
dependable revenue growth of +5.5% a year.
Last point: The word around the campfire is that
Mexican billionaire Carlos Slim -- who just edged past Bill Gates
for the second spot on the Forbes list of richest people in the
world -- is accumulating shares in this company. When I hear
that a smart investor like that is committed to a company, I
get interested. Savvy business minds don't throw good money
after bad; they move in when they smell a bargain.
If you've watched media companies over the years, you
know there are no dependable income opportunities in the United
States right now. Investing in U.S. publishers is
tremendously risky. Their stocks are exceedingly volatile:
Not only are newspapers losing out to other media, ad spending
overall is tied to the state of a fragile and lackluster
economy.
That's why it's so crucial for
investors to look abroad for those rich, double-digit yields.
And finding those opportunities is what subscribers of my
premium investing newsletter
High-Yield International
have come to count on.
If you'd like to learn the name of this media company
-- plus receive a steady stream of foreign stocks, preferreds and
other investing ideas with exceptionally high dividend yields
each month -- then I'd like to extend you a
personal invitation to try my newsletter ... High-Yield International.
Visit this link to learn
more.
Thanks for joining me on my search for today's
highest-yielding securities!
--
Nick Lanyi
Co-Editor
Global Dividend Opportunities
GlobalDividends.com
839-K Quince Orchard Blvd.
Gaithersburg, MD 20878-1614
P.S.
-- Don't miss a single issue! Add our address, Editors@GlobalDividends.com,
to your Address Book or Safe List. For instructions, go
here.
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