The following is from Forbes.com:
The best-performing online investors catch a rebound and a yield with World Wrestling.
The best-performing online investors, Marketocracy’s M100, have a new tag-team partner for the New Year: World Wrestling Entertainment.
The M100 last week carved out a stake in the Stamford, Conn.-based company, which has operated in the sports entertainment business for more than 25 years with its well-known brand of professional wrestling. At the heart of World Wrestling Entertainment’s (nyse: WWE) success, of course, are its supernaturally bull-necked wrestling superstars like Triple H and Undertaker, who put on shows throughout the world.
Yahoo! BuzzIn 2007, WWE held 233 live events throughout North America, entertaining more than one million fans with shows of muscle, pyrotechnics and impossibly attractive women known as the “WWE Divas.” The company has generated more than $2 billion in pay-per-view revenue over the past 20 years and $600 million in annual retail sales, marketing everything from action figures to bed sheets.
More than the high-flying aerobatics and skin, what the M100 really like about the WWE is the fat yield. The $0.36 dividend per common share currently equates to a 12.8% annual yield, essentially the highest level since the stock began to pay dividends in 2003. A payout ratio of 178% might make some dividend hunters skittish, but analysts covering the company argue that the dividend is secure. They’re comforted, they write, by the company’s negligible debt level, considerable cash balance and the fact that the dividend remains a priority of WWE’s management and board.
Other reasons for optimism: The company is well run, remains in strong financial condition, has numerous growth opportunities (particularly overseas) and sports an attractive valuation. WWE is currently trading at 15 times estimated 2009 earnings per share. Over the past five- and 10-year periods, WWE’s average forward price/earnings multiple has been about 21, analysts note.
