By: Jennifer Saba Goldman Sachs issued a report today discussing which newspaper companies will offer the most enticing dividends for the year. The firm's picks: McClatchy, Washington Post, Belo, Tribune, and Gannett (in that order) have the greatest potential to increase their dividends, the report said.
Why does this matter? The firm explains that during a "volatile and low return stock market environment" investors turn their eyes toward companies that increase their dividends, that have upside in payout ratios, and have strong free cash flow. Furthermore, dividend increases can signal to investors "management's confidence in a company's financial outlook" rather "than a share repurchase program," Goldman said.
The companies that probably won't be increasing their dividends: Dow Jones and New York Times, both of which "currently have payout ratios about historical averages, suggesting limited room for near-term dividend increases."