While Macquarie Media Ltd (ASX: MRN) and Nine Entertainment Co Holdings (ASX: NEC) appear to be at the top of their game in recent times, these two media stocks are flailing in the shadow of their peers’ success.
Fairfax Media Limited (ASX: FXJ)
It’s been hard going for Fairfax Media since the spin off of its successful real estate classified business Domain Holdings Australia Ltd (ASX: DHG) in November 2017, with the share price down another 1% at the time of writing to 68c per share.
Fairfax has struggled to get investors to rally behind it since the Domain cast off and the February release of half-year results revealed a 3.3% drop in revenue on the previous corresponding period and a statutory NPAT halving.
Fairfax did log an EBITDA of $169.9 million – up 1.3% – with company head honchos pointing out that Fairfax still owns 60% of Domain as a widely-fancied growth asset.
Combined with strength from the Radio unit and Fairfax’s stake in streaming service, Stan, we could see pretty solid performance in the future if Fairfax plays its cards right.
But it is difficult to feel confident as the Fairfax share price continues to slide, while peers like Macquarie Media sit at 52-week highs, with Nine Entertainment only slightly off the same mantle itself.
Fairfax has recently announced it will cut ties with digital content ratings group Nielsen and take control of its own audience data, but the company will likely have to reduce debt further and make some headway in clawing back profit to win the trust of investors.
HT&E Ltd (ASX: HT1)
The former APN News and Media Limited, HT&E Ltd is also circling 52-week low territory, opening up slightly today to sit at $1.69 at the time of writing.
The HT&E share price has been on an obvious downward trend in the last 12 months, dropping 36% from its $2.67 price at this time last year.
Over a 5-year chart HT&E’s share price has lived up to the long form of its “Here, There & Everywhere” acronym, rising to a record high of $5.56 in March 2015.
But while HT&E appears to be struggling at present, the company’s outdoor advertising business Adshel could be the sweetener for boosting profits in the next couple of years.
HT&E’s FY17 pro forma results saw group revenue up 3% to $472.3 million and EBITDA also up 1% – in line with guidance.
Its Australian Radio Network business managed to maintain its top metro ratings slot and while Adshel took a hit with the loss of its Yarra Trams contract, its 7-year strategy with Metro Trains Melbourne should be lucrative.
HT&E will pay a 4c per share fully-franked dividend on April 26.
Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.
You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!
Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.
Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.