Meredith Suspends Dividend as Advertising Revenue Plummets
Meredith (MDP) suspended its dividend today, citing "significant advertising campaign cancellations and delays." The media company's advertising revenue has taken a major hit since the coronavirus pandemic emerged as businesses across almost every industry have slashed non-core expenses.
We downgraded Meredith's Dividend Safety Score to Unsafe on March 31. We had previously downgraded the firm's rating to Borderline Safe last September due to weak prospects and heightened leverage from the Time acquisition.
Until today's announcement, Meredith had paid uninterrupted dividends for more than 70 consecutive years.
Here's what Meredith said regarding the dividend in the press release:
We downgraded Meredith's Dividend Safety Score to Unsafe on March 31. We had previously downgraded the firm's rating to Borderline Safe last September due to weak prospects and heightened leverage from the Time acquisition.
Until today's announcement, Meredith had paid uninterrupted dividends for more than 70 consecutive years.
Here's what Meredith said regarding the dividend in the press release:
"At the same time, the COVID-19 crisis has created an extremely challenging business environment, including significant advertising campaign cancellations and delays," continued Harty. "While our financial position is strong, given the impact on advertising – which represents approximately half of our revenue mix – we are proactively taking aggressive actions to strengthen our liquidity and enhance our financial flexibility in the near-term to effectively navigate the current environment."
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The Meredith Board of Directors has also unanimously voted to pause Meredith's common stock dividend. The Board remains committed to paying a dividend over the longer-term and would seek to resume Meredith's dividend policy when advertising market conditions improve.
