Corus Entertainment Inc. (TSX:CJR.B) is a great dividend stock and in the past three months its share price has plummeted 16%. As a result of the big drop off in share price the dividend has risen to 9.8%, which is paid out on a monthly basis.
The company is behind popular channels like HGTV, History, Showcase, Disney Channel Canada and many others. Corus has lots of potential for future growth and it could be a great opportunity to snap up a great dividend stock that is trading at just 12 times its earnings. The stock is already trading a shade below book value.
Corus failed to impress investors with its most recent quarter not showing any top-line growth, but the company did see a big improvement in its profits, which at $29 million were much improved from the previous year where Corus barely broke even.
With Shaw Communications Inc (TSX:SJR.B)(NYSE:SJR) as a big investor in the company, Corus also has a lot of stability behind it.
Although investors may be concerned about the company’s payout ratio given that in the trailing twelve months earnings per share of $0.95 are well below the $1.14 that Corus pays out per share, a look at cash flow shows us that there isn’t a problem.
Free cash in the last four quarters as totaled $265 million and is well above the $106 million that the company paid out in dividends, suggesting that the payout is very stable. Although the company hasn’t increased its dividend in nearly three years, it still is a great dividend stock and a further drop in price could send the yield into double digits.