If you read the news you have likely come across an article written, edited or distributed by Thomson Reuters (TRI). This information giant has a $30 billion market capitalization and is using its global spread (over 93 countries) in a profitable manner, yielding 3.27% in dividends at the moment.
In a nutshell, Thomson Reuters (TRI) delivers critical information to leading decision makers in the financial, legal, tax and accounting, healthcare, science and media markets. The company’s 2009 revenue came in at $12.9 billion, and while the Americas accounted for 59% of that, Europe, the Middle East and Africa was at an impressive 30%. The firm employs over 55,000 employees in more than 100 countries.
The annual dividend for 2009 came in at $1.12. The dividend is paid quarterly, and for the first quarter of 2010 the quarterly dividend was raised to $0.29, representing a 3.5% increase and providing the 3.27% annual yield. The dividend has grown at over 9% annually since 2005. The company paid out total dividends of $927 million in 2009, and cash from operations totaled over $2 billion, giving a clear indication that the dividend is not going to disappear anytime soon.
The PE ratio is high at 38 times, but don’t be put off – the printing and publishing industry average is 26 times. The company has been including integration costs in its income statement which in the last quarter added about $0.10 per share to costs. Taking these out and extrapolating using a “back of the envelope” equation, one can see that earnings per share is more likely $1.38 per share. That would put the company on a 25 times PE ratio, which is about average for the industry.
Results for the most recent quarter were good, and the company expects things to improve going forward, saying “The tentative recovery in our net sales that we began to see in the second half of 2009 has firmed and accelerated in the first quarter of 2010. We continue to expect that we will see revenue growth return in the second half of this year”.
On the negative side the company continues to issue shares for acquisitions which has resulted in the shares in issue increasing to 834 million in 2009 from 2008, representing a 7.4% dilution. Any dilution to shareholders lessens the value of each share and therefore the potential dividend claim that stock represents.
Thomson Reuters (TRI) is a global brand and dominates many of the markets it operates in. Still, it has tremendous room to grow into other news sectors and in particular the mobile space. It’s my belief that Thomson Reuters will continue to generate strong earnings, cash flows and dividends going forward. Be wary of big acquisitions that are dilutive to stockholders though.
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Comments
Sugiarto Setiabudi
June 02, 2010
I heard, Thomson Reuters being cheating public in referring to rise devidend to its shareholders.
In fact , a lot of retail investors , have not received yet devidend in several times.
Further more, Thomson Reuters provided its cost center enployees to use pirate software at Thomson Reuters work place ,in order to cut cost along with to increase reward for failures to the senior executives Thomson Reuters.
Thomson Reuters is good example of company with poor corporate governance system due to hired and employeed
incompetent and immoral lawyers to be its general counsels world wide.
Money laundering,fake news and photo are the real picture of Thomson Reuters.
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