December 10, 2018

Torstar Corp (TS/B)


 

Torstar Corporation (TS/B) is one of the most prominent media entities in Canada.  While their name obviously comes from their chief asset – The Toronto Star Newspaper – the company has plenty more holdings than just a regional daily.  Torstar now owns over 100 newspapers in print in a wide variety of markets.  They also own a publishing company named Harlequin that has become synonymous with the romance novel genre and has several other smaller media interests. Perhaps the most important aspect of Torstar’s business plan going forward is their presence in the technological sector, which will no doubt expand in the years to come.  It is safe to say that investing in Torstar (TS/B) gives investors a piece of an extremely well diversified media company.

 

TorstarThe important online aspect of the Torstar company has been responsible for much of the company’s profits.  Their subsidiary Torstar Digital, “Develops online solutions across the media operation to meet the needs of online advertisers, consumers and readers.”  In addition, the company also own notable digital businesses such as Workopolis (the main Canadian career website) and Olive Media (a world wide web advertising company that has a great reputation for quality, service, and innovation).  In 2010 Torstar Digital bought out the Canadian frugal sensation WagJag which has seen sensational growth that does not appear to be slowing down.  By following a Groupon-model, WagJag stands to cash in as thriftiness grows more and more popular amongst Canadians.

 

Times within the media sector have been tough for everyone involved, but Torstar Corp (TS/B) has been able to weather the storm better than most simply because of its online properties and the diverse streams of income the company enjoys.  In their most recent statement Torstar asserts, “Our goal at Torstar is to be a growing progressive media organization that takes advantage both of the breadth of the assets currently at out disposal and the depth and quality of talent throughout our many businesses.”  This is the sort of mindset I would be looking for from a modern-day media company.  With the state of media changing so quickly, companies have to be dynamic and forward-thinking to keep up, and I believe Torstar (TS/B) has done that.  The statement went on to say, “To ensure our success, we will aggressively seek to broaden and diversify Torstar’s revenue base building from within, acknowledging that sustained future growth will at times require investment in areas that may lie further from our traditional core.”  This is music to the ears of companies who are finally seeing budget dollars pouring back into advertising after being slashed so drastically during the recent recession.

 

Torstar Corp (TS/B) appears to have done a great job of diversifying away from the pure print medium that has been characteristic of other newspaper companies around North America, and has consequently recorded some modest profits the last few years.  Their dividend sits at a respectable 2.59% and the stock has a very attractive Price-to-Earnings ratio of 12.33.  While dividend-growth gurus would wisely point out that Torstar’s dividend has seen an 11.47% cut over the last five years, I would respond that the industry was hit particularly hard due to the advertising situation I previously mentioned.  Torstar was also aggressively using cash flow to expand in various directions that I think will give Torstar (TS/B) a true competitive edge in the years to come.

 

Torstar Corp (TS/B) Dividend Graph:

TSE TSB

Torstar Corp (TS/B) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioINDUSTRY_SUBGROUPDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
TS/BTorstar Corp12.773.9248.04Publishing-Newspapers0.43-12.940.00

 

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