In mid-August 2019, Entercom Communications shares slid on word that the audio media company’s board of directors had slashed its regular quarterly dividend to 2 cents per share, from 9 cents.
It appears Entercom is sticking with giving its stockholders its two cents.
Entercom on Tuesday confirmed that its Board of Directors approved a quarterly dividend on its stock of $0.02 per share.
The dividend is payable on March 27 to shareholders of record as of the close of business on Friday, March 13.
Entercom is dealing with more softness in its share price, with ETM trading at $3.51 as of 1:45pm Eastern, off 2 cents. It negates all improvement seen since November 1, with an Oct. 8, 2019 dip to $3.08 something the company likely wishes will not happen again.
The soft dividend may lead to continued malaise among Entercom shareholders hoping for something more, like seen one year ago.
Why did Entercom reduce the size of its dividend back in August 2019? President/CEO David Field explained that the move frees up some $39 million in capital that the Entercom board intends to use in repurchasing shares and to accelerate deleveraging — a growing concern for Entercom.
“We believe that redeploying capital from dividends to both share buybacks and debt reduction will allow us to drive increased shareholder value given our belief that our stock is now trading significantly below its intrinsic value and because this action will allow us to accelerate progress on our commitment to reduce total net leverage to four times,” Field said.
Investors revolted, putting shares at $3.10.
It was July 2009 when Entercom shares were priced at this level. Now, the parent of Radio.com, Pineapple Street and Cadence13 is bracing for a fresh 10-year low.
