The company’s shares were flirting with $167 in Friday’s trading on the Nasdaq GlobalSelect exchange. They bear a 1-year target estimate of $187.67.
For investors, getting in to Nexstar Media Group would involve purchasing the company’s stock at a record high, as NXST has surged from $57.73 in March 2020.
For Simply Wall St., snapping up shares today may still be beneficial. Why? Nexstar is going ex-Dividend next week.
On November 10, NXST trades ex-dividend. And, as Simply Wall St. notes, the ex-dividend date matters because whenever a stock is bought or sold, the trade takes at least two business day to settle. In other words, investors can purchase NXST before November 10 to be eligible for a dividend paid on November 29.
Nexstar’s next dividend payment will be $0.70 per share.
For the company founded by CEO Perry Sook, a “low and conservative payout ratio of just 12% of its income after tax” was determined by Simply Wall St.” Noting that cash flow is typically more important than profit for assessing dividend sustainability, the financial blog dutifully checked to see if the company generated enough cash to afford its dividend.
“The good news is it paid out just 10% of its free cash flow in the last year,” Simply Wall St. notes. “This is generally a sign that the dividend is sustainable.”
Is NXST worth buying for its dividend?
“We love that Nexstar Media Group is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow,” Simply Wall St. concludes. “These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. There’s a lot to like about Nexstar Media Group, and we would prioritize taking a closer look at it.”
