By: Mark Fitzgerald
GateHouse on Thursday declared a quarterly dividend of 40 cents per share for the quarter ended Sept. 30, 2007, the same amount it declared in June, when it boasted that it had increased the payout by 25% from its first dividend declaration.
Fairport, N.Y.-based GateHouse’s business model has been built on offering dividends higher than most newspaper companies. In recent months, the share price of the acquisitive chain has fallen as investors doubted its ability to continue to deliver high dividends.
Earlier this week, Banc of America analyst Joe Arms initiated coverage of GateHouse and five other newspaper companies by saying he expected the community newspaper publisher to cut its dividend. Arms said in his estimation, GateHouse’s current dividend rate exceeds potential free cash flow by 20%.
GateHouse said the dividend is payable Oct. 15 to shareholders of record on Sept. 28.
At mid-day, GateHouse (NYSE:GHS) trading at 12.55, down 20 cents, or 1.55%, from its opening. Since its initial public offering last October, GateHouse has traded in a range of $11.80 to $22.55.