July 24, 2014

Astral Media Inc. (ACM)

 

 

Astral Media Inc. (ACM) is one of a select few Canadian media companies that can legitimately call themselves leaders in the market.  They have been consistently diversifying their operations and now have large holdings in radio, television and an innovative program called “out-of-home advertising.”  Astral also has about a hundred websites that see millions of visitors every year and offer a variety of interactive experiences and products online.  The company’s headquarters are located in Montreal and Toronto and the company employs about 2,800 people.  Its main competitors would be Corus Entertainment (CJR.B), and increasingly the four main telecommunications giants: Shaw Communications (SJR.B), Rogers Communications Inc. (RCI.B), Bell Inc. (BCE), and Telus corp. (T).

 

astralThe company can trace its lineage back to four brothers: Harold, Harvey, Sidney, and Ian Greenberg.  They started up a humble photo-finishing shop in 1961.  In 1973 the company merged with the French company Bellevue Pathe to form a publicly-traded business that specialized in the distribution of films and television programs.  The Greenberg family was the largest shareholder and Harold became the CEO.  In 1983 the company started its foray into television when it took control of two channels named “The Movie Network” (still a major player today) and “Super Ecran.”  Over the next couple of decades the company expanded steadily by acquiring media assets all over Canada.  Finally, in 2000 the former Astral Communications changed its name to Astral Media and has continued to expand ever since.

 

Astral Media Inc. (ACM) is proud of the fact that it is one of the most diverse media companies in Canada.  It boasts a revenue breakdown that is 57% TV, 35%, Radio, and 8% out-of-home advertising.  Astral’s radio division operates 83 licensed radio stations across 50 markets in Canada.  By any measure including revenue, number of stations, or number of employees, Astral Radio is the largest radio broadcaster in Canada.  It includes some of the most well-known brands within the industry.  One of its core strategies is promoting local music and innovative new programming.

 

Astral Media’s TV division is the largest provider of English and French language pay and speciality television in Canada.  In fact, along with Corus and Shaw (through their recent acquisition of Global), they pretty much have the market cornered.  Astral (ACM) offers high quality channels like Showtime and HBO to the Canadian market, along with a number of niche special-interest channels like Vrak and Family Channel. Niche channels has been a very profitable and fast growing division of Astral. People are more intend to pay an access to a niche channel than regular TV as they can watch what they are looking for only.

 

Astral Media Inc (ACM) is plainly well positioned within the industry.  Even during a lean time in advertising the company seen an earnings growth of 20%.  If you’re looking for strong divided plays however, Astral may not be for you.  It’s dividend at 2% might be strong when looked at overall, but against other major players in the industry it lags behind.  If you choose to take the view that Astral is taking its earnings and strengthening its balance sheet, or pursuing acquisitions that will set it up better in the long term, than it may make sense for you to consider the company despite the lower dividend numbers.  I just think that when you compare the stocks numbers to those of its competitors’ it doesn’t compare favourably.

 

Astral Media Inc (ACM) Dividend Stock Graph:

TSE ACM.A

 

Astral Media Inc (ACM) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioINDUSTRY_SUBGROUPDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
ACM/AAstral Media Inc36.62.0515.25Multimedia0.2920.1125.00

 

 

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  1. [...] is controlled by a few large conglomerates.  Corus Entertainment Inc (CJR/B) and Astral Media Inc (ACM/A) join the mega-telecommunications giants when it comes to delivering media through television and [...]

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