Buy This Media & Radio Station Stock, Dividend Yields Of 3.5% & Low Valuations

With Covid 19 worries now behind and with the economic situation likely to get back to normal, we believe that media stocks could be the ultimate beneficiaries. Here is one media stock that is good on dividend yields and has significant presence across the north and western region.

Buy the stock of DB Corp

The company is one of the largest print media companies in the country. It runs Hindi Newspaper in 11 states, Gujarati and Marathi newspaper, digital and mobile and radio station called 94.3 My FM.

In some of the states like Madhya Pradesh, Chattisgarh, Haryana and Chandigarh it remains the dominant player with the Dainik Bhaskar newspaper. In Rajasthan it has clear Leadership as per Readership in all possible metrics.

Current market price	Rs 88
52-week high	Rs 125
52-week low	Rs 71

 

Digital business to drive growth

DB Corp is now focussing on its digital business. According to the latest ComScore results, the Dainik Bhaskar App monthly users have increased by approximately 7 times since the beginning of 2020. The company is also one of the highest-rated Hindi (4.4/5) and Gujarati (4.4/5) news apps with tens of millions of downloads.

In Sept 2021, the monthly average users on the app was 10.85 million users and is growing.

Financial performance

For the quarter ending Sept 2021, the company reported advertising revenue of Rs 3029 million. Net profits at the company came in at Rs 538 million. The net profits for the Sept 2021 quarter was up 88.5% as compared to the corresponding period of the previous quarter.

The EPS for FY 2021 was placed at Rs 8.08 and we believe that the company can move towards an EPS of Rs 15 in 2022-23, as FY 2021 was a covid induced year. Based on that the stock at around Rs 88 is priced at a p/e of just 6 times. With a debt free status and dividend yield of 3.5%, the stock is not expensive at all.

With the radio and the digital business likely to power the company, we believe that DB Corp is also future ready. Those who can hold the stock for a period of 2-3 years could reap good dividends.

Disclaimer:

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. The author and his family do not hold shares of DB Corp. Investors should exercise caution on account of heightened volatility in the markets currently.