Torstar offers value and a high yield

Article Excerpt

Torstar’s earnings jumped in the latest quarter, but its shares have fallen, because it missed consensus estimates. Still, its cost cuts should make its newspapers more profitable, and its Internet businesses are growing quickly. As well, Harlequin should gain from the shift to ebooks from printed books. Torstar now trades at just 6.3 times its likely 2011 earnings of $1.72 a share. The stock yields a high 4.6%. TORSTAR CORP. $10.99 (Toronto symbol TS.B; Shares outstanding: 79.6 million; Market cap: $883.5 million; TSINetwork Rating: Above Average; Dividend yield: 4.6%; www.torstar.com) publishes The Toronto Star, which is Canada’s largest daily newspaper by circulation. The company also publishes three other daily newspapers and over 100 weeklies, mainly in southern Ontario. Its other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels. In the three months ended June 30, 2011, Torstar’s earnings per share excluding one-time items jumped 20.5%, to $0.47 from $0.39. The company’s interest costs fell as…