New Media Investment Group Offers 100%+ Upside With Downside Protection From Sustainable ~7% Dividend Yield
- As a post-bankruptcy equity and recent spin-off, NEWM is an undervalued and underfollowed local newspaper and online media stock that trades at 6.1x LTM pro-forma EBITDA and 7.2% dividend yield.
- Not a secular dying business: investors get a turnaround, stabilizing business with free optionality for the company to generate substantial value through accretive acquisitions, offering a compelling asymmetric risk-reward opportunity.
- NEWM owns 450+ local community newspapers that are more stable and have loyal readership base. NEWM purchases distressed newspapers at <3.5x EBITDA and has 1300 potential targets in M&A pipeline.
- One of the main competitors for M&A is Warren Buffett’s B.H. Media group, which poses limited risk since they operate in different, large, and fragmented markets.
- NEWM can leverage its strong local footprint and regional scale to cross-sell its Propel digital marketing, an organic high-growth segment with a potential $24B total addressable market.