Sinclair Broadcast Group
Dividend Yield: 5.2%
Market Cap: $940 million
Sinclair Broadcast Group (NASDAQ:SBGI) is a television station owner that serves roughly 45 markets across the United States. Some small-cap dividend chasers might remember the name painfully, after it eliminated its dividend in 2009, then reinstated it at roughly half the payout back in 2011 — but at current valuations, SBGI could be a buy.
Why mess with a TV broadcaster in this digital age of Apple (NASDAQ:AAPL) iPads and smartphones? Well, because the lion’s share of its stations include major networks such as Fox, ABC, CBS and NBC. These are hardly going to disappear from living rooms anytime soon, even if you can watch some of the shows online.
Furthermore, after posting a loss in 2008 and 2009, the restructured Sinclair seems to have hit its groove. The company saw a big jump in Q3 profits thanks to political spending, but also has improved its EPS in every single quarter this year compared with 2011 numbers.
Revenue admittedly is stagnant, but the dividend is sustainable at a 50% payout ratio on these numbers.
The big question, of course, is whether there is growth ahead for Sinclair. Maybe not — but with a forward P/E of around 9 and the hope of a secular recovery to boost advertising, it might not take a lot to move shares higher in 2013.