There’s no doubt Nine Entertainment Co Holdings Limited (ASX: NEC) will be aiming to continue its recent run of growth into 2020 and beyond. After running hard on expansion and consolidation in 2019, the Nine Entertainment share price has risen more than 30% from the same time last year.
Nine won the coveted number 1 ratings network for the calendar year, a prize that has eluded it for 12 years. Combine this with other success stories across multiple platforms and you’ll see why some brokers are urging a strong buy on Nine shares.
The Nine share price is trading for $1.85 at the time of writing and offers a gross dividend yield of 7.72%. There are some good reasons to suggest that now might be the time to add Nine to your portfolio, or at least put it on your watchlist.
Despite losing the rights to broadcast cricket, Nine has filled its slate with a variety of programs that rated exceptionally well. You may not watch a lot of ‘reality based’ programming but a LOT of people do. Married at First Sight, Lego Masters, The Voice, Australian Ninja Warrior, and The Block were all major ratings winners in the golden 7.30pm time slot. Married at First Sight was the highest rating non-sports program for the year. We can expect to see most of these back on our screens in 2020.
Nine became the nation’s largest media firm after the acquisition of Fairfax in 2018. There was no rest in 2019 as Nine picked up the Macquarie Radio network. This acquisition includes prized radio properties 2GB in Sydney, 3AW in Melbourne and Brisbane’s 4BC.
Streaming on STAN
At its recent AGM, Nine CEO Hugh Marks outlined STAN’s success in gaining both subscribers and profit. When you consider the competition for subscribers in this market, STAN has done remarkably well. I shall be the first to admit I thought STAN might struggle against the big multinationals like Netflix, Amazon Prime and Disney Plus. For STAN, strategic programming and a healthy amount of Australian content, including exclusive commissions, has worked a treat.
Nine’s online real estate catalogue hasn’t had quite the year that other parts of the business have. This is likely because it follows the same cyclical nature of the wider real estate market. It follows that, as we see improvements in the housing market, Domain’s fortunes will follow suit.
Nine Entertainment is now an increasingly large, multi-platform media empire that operates in both the old and new media spaces. Recent acquisitions, combined with strategic management of the older media forms like the free-to-air tv stations, can deliver huge opportunities for cross promotional outcomes, partnerships and cost benefits via shared services for the various units. The future is looking bright for Nine and I’d urge investors seeking media stock or diversity in their portfolio to take a closer look.
Motley Fool contributor JWoodward has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nine Entertainment Co. Holdings Limited. 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.
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