December 13, 2018

FP Newspapers Inc (FP)

 


 

FP Newspapers Inc. (FP) gets their name and ticker symbol from their main business: The Winnipeg Free Press.  The newspaper has been successful when judged by any metric relative to other print media (the caveat of course being that print media has not been successful at all).  The “FreeP” as it is affectionately known as, holds a commanding market share in Manitoba and has a circulation of about 129,000.  The iconic newspaper has roots that go back 137 years and its high level of journalism has allowed it to dominate the local news market in Manitoba.

 

FP newspapersBesides the WFP, FP Newspapers Inc. (FP) also owns a few other print media entities.  Including several community-based weekly newspapers, the Brandon Sun, and their new acquisition of a Derksen Printers and their weekly periodical known as “The Carillon” which circulates throughout the Southeast corner of Manitoba.  The Brandon Sun has been in business almost as long as the Free Press itself (125 years).  It serves not only the area of Brandon, but the surrounding rural communities as well.  It has a circulation of about 71,000 readers and has a strong local flavour focusing on the local weather, farm reports, and sports teams.

 

The smaller Winnipeg-based community newspapers that FP Newspaper Inc. (FP) owns are The Lance, The Metro, The Herald, The Times, The Sou’wester, and The Headliner.  They each cover specific part of Winnipeg and the bedroom communities that surround them just outside of Winnipeg.  They get published weekly and have a combined circulation of 182,000.  These papers are also well-established names and many have been in business nearly 100 years by themselves.

 

The FP stock is representative of the whole print media industry in Canada at the moment.  If you think that companies will pull out of this downfall and will re-invest in these modes of advertising when they are flush with cash again, then there will likely never be a time when you can buy such a well-established paper at this rate.  With and absolutely ridiculous Price-to-Earnings ratio of 4.83 and a dividend yield of over 12%, the metrics look too good to be true for a company that has been around as long as the “Freep.”

 

My take on the stock is essentially the old cliché, “If something appears too good to be true than it usually is.”  The price of FP Newspapers Inc. (FP) is low because there is no market demand for it.  It’s dividend has dropped over past few years just like that of other print media, and it appears like most investors have little faith that newspapers are one medium that have lost their message.  With so many other solid places to invest your dividend-earning cash within Canada, I would suggest this stock is for the risk-takers out there and with revenues down over 5% from last year I would stay away.

 

FP Newspapers Inc. (FP) Dividend Stock Graph:

TSE FP

 

FP Newspapers Inc. (FP) Dividend Metrics

TickerNamePriceDividend YieldPayout RatioINDUSTRY_SUBGROUPDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
FPFP Newspapers Inc5.4610.9969.33Publishing-Newspapers0.00-12.02-32.00

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