Earlier today, Corus Entertainment (TSE:CJR.B) (OTC:CJREF) announced that it slashed its dividend in half from a quarterly rate of C$0.06 per share to C$0.03 per share. The reason for the cut is so Corus can focus more on repaying its debt, which remains very high at around C$1.3 billion compared to its cash position of C$80.9 million and its market cap of C$370 million.
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In the trailing 12 months, CJR.B has paid C$49 million in dividends. Therefore, this cut could save the company around C$24.5 million annually in dividend payments, all else being equal.
Nonetheless, the firm’s yield still remains very juicy, as a quarterly rate of C$0.03 equates to a 6.5% annual return, and Corus believes its current dividend is still very competitive. Also, it’s above the long-term target of “maintaining a dividend yield in excess of 2.5% and current industry peer benchmarks.”
Lastly, CJR.B is changing its dividend payment schedule. After its Fiscal Q3 dividend (to be paid at the end of this month), its future distributions will be adjusted to occur in August, November, February, and May.
Is CJR.B Stock a Buy, According to Analysts?
According to analysts, CJR.B stock comes in as a Moderate Buy based on two Buys and five Holds assigned in the past three months. The average CJR.B stock price target of C$3.10 implies 66.8% upside potential.
