Is News Corp a Good Dividend Stock?

News Corp (NASDAQ:NWSA) is one of two media conglomerates owned by mogul Rupert Murdoch, alongside Fox Corp (NASDAQ:FOX). Together they represent a broad publication and broadcasting powerhouse.

Although analysts decried the death of television and newspapers at the turn of the century, they are still highly effective ways of reaching large audiences.

Does that mean News Corp is a reliable dividend stock?

Certainly, it has paid a steady bi-annual dividend over the past seven years of $0.10 per share. That number hasn’t gone up with inflation, so the company is reinvesting in growth versus rewarding shareholders for holding.

And NWSA share price has tripled over the past two years from pandemic lows around $8.00 per share. Still, it experienced less than a quarter of that growth in the last 12 months, although it does have an impressive portfolio of companies under its wing.

Let’s read the fine print on News Corp to determine if it will report high profits for investors or leave portfolios in the obituary section.

What Companies Does News Corp Own?

News Corp (NWSA) is a media giant. It holds a variety of media assets, including News UK, Dow Jones & Company (which includes Wall Street Journal, MarketWatch, and Barron’s), News Corp Australia, New York Post, and HarperCollins. This makes it a major player in the publishing industry.

It also has exposure in real estate and radio and TV broadcasting through its subsidiaries. It owns Realtor.com, Foxtel, and Storyful as well.

Although Fox and News Corp are often intertwined, the companies split in 2013. That means that the Fox Entertainment (which includes TMZ), Sports, and News brands are no longer a part of the modern News Corp. Performing this split was a necessary step to allow both companies to grow without antitrust scrutiny.

So, how does it make money today?

How News Corp Makes Money

News Corp has a diverse range of revenue streams, including digital real estate, subscription video, Dow Jones, news media, and book publishing.

It’s largely a mix of subscription and advertising revenue in each of these segments, although it also generates revenue from licensing its news and information services, along with monthly affiliate fees for its subscription video.

Overall, News and Information Services is the bulk of its revenues, accounting for nearly half (48 percent) of its full-year revenues.

Its real estate segment generates revenue through real estate listings, while also upselling agents, brokers, and developers. It also licenses property data services. Meanwhile, its book publishing segment earns money on the sale of books across a variety of genres in both the U.S. and internationally.

Altogether, these segments earned News Corp $9.36 billion in revenue during the fiscal year 2021. That’s a four-percent increase from the prior fiscal year’s take of $9.01 billion and shows the potential growth left in the company, thanks to its shrewd leader Murdoch.

Who Is Rupert Murdoch?

Murdoch is an Australian media tycoon with an estimated net worth of $21.7 billion, according to Forbes. He founded News Corp in 1979 after proving his understanding of the news business through several newspapers owned by his father. He soon expanded his empire into the U.K., buying News of the World and The Sun. It wasn’t long before his media empire grew across the pond into the United States.

By the start of the 21^st century, Murdoch was an influential figure in both media and politics. In the 2010s, this power was challenged when his journalists were accused of engaging in unethical and illegal behavior, such as hacking mobile phones for information.

His tabloid-style of journalism is often the target of controversy, but there’s no denying his success. Murdoch is a master of clickbait headlines that get people’s eyes, and that makes it easy to sell advertising space.

Here’s a deeper look at the company’s financials.

News Corp Financials and Dividend

News Corp is growing revenues, with its $2.5 billion haul in the first fiscal quarter of 2022 representing an 18 percent increase from the prior year’s term. This gave the media giant $267 million in net income, compared to $47 million the same period of the prior year.

Business went so well that the company announced a $1 billion stock repurchase program. This is despite free cash flow dropping from $65 million in the first quarter of last year to -$25 million in its most recent reporting.

But it has $2.1 billion cash on hand, which helped it weather the storm, while its debt stands at $3.27 billion. It spent an additional $7 million year-over-year on shareholder dividend payments this past quarter.

Still, its bi-annual dividend of $0.10 remains unchanged. If you’re looking for a steady dividend, this could be it, but you’ll only get it twice a year, which may not be enough liquidity for some.

News Corp Vs Googl Vs Meta

News outlets are competing with more than each other – they’re also fighting for ad revenue from major platforms like Meta Platforms (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL). These giants notoriously attempt to keep ad revenue on their platforms and have been squeezing out online media. And they’re famously biased against conservative news.

The fight for ad revenue, along with changing data privacy laws, stand to limit the growth potential of this media conglomerate.

Is News Corp a Good Dividend Stock: The Bottom Line

News Corp is a media conglomerate created by mogul Rupert Murdoch. Although it underwent changes over the past decade, it’s still an influential powerhouse that generates billions of dollars in annual revenue. This makes Murdoch one of the most influential figures in media and politics.

The dividend is steady, but that could be a pro and con since it hasn’t been raised in years. If you’re looking for consistency, News Corp has it for now. 

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.