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Saga Communications (SGA) – Compelling Total Return Potential

Communication Services
0 min read

Friday, December 08, 2023

Saga Communications, Inc. is a broadcast company whose business is primarily devoted to acquiring, developing and operating radio stations. Saga currently owns or operates broadcast properties in 27 markets, including 79 FM and 33 AM radio stations. Saga’s strategy is to operate top billing radio stations in mid sized markets, defined as markets ranked (by market revenues) from 20 to 200. Saga’s radio stations employ a myriad of programming formats, including Active Rock, Adult Album Alternative, Adult Contemporary, Country, Classic Country, Classic Hits, Classic Rock, Contemporary Hits Radio, News/Talk, Oldies and Urban Contemporary. In operating its stations, Saga concentrates on the development of strong decentralized local management, which is responsible for the day-to-day operations of the stations in their market area and is compensated based on their financial performance as well as other performance factors that are deemed to effect the long-term ability of the stations to achieve financial objectives. Saga began operations in 1986 and became a publicly traded company in December 1992. The stock trades on NASDAQ under the ticker symbol “SGA”.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Announces a hefty special dividend. The company announced that it declared a special cash dividend of $2.00 per share to be paid on January 12, 2024 to shareholders on record December 20, 2023. The aggregate amount of the special dividend of $12.5 million will be paid from its sizable cash position. We believe that the announcement reflects the company’s confidence in its favorable fundamental outlook and significantly strong financial position.

Strong balance sheet. As of Sept. 30, the company had $31.2 million in cash and no long term debt. As such, the company has a strong balance sheet that will be maintained following the special dividend payment. This recent dividend announcement follows its Board’s review of the appropriate level of cash to be maintained on its balance sheet, which will reduce cash and short term investments to roughly $25 million. 

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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

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