Analysts at Faida Investment Bank recommend a sell for the Nation Media Group stock. The share has lost 5.3 per cent of its value since the start of 2019 and approximately 40 per cent in the past year. Like other media companies around the world, the firm is experiencing a decline in revenues due to the shift from print media to digital media.
As per the Faida report, the media giant is trading at a lower PE ratio of 8.99x compared to its rival Standard Media Group with a PE ratio of 13.29x as at 1 February 2019. Even with the drop in revenue, the company has maintained a dividend payout of Ksh10 per year since 2013. Its dividend yield is 16.1 per cent.
“As the media environment shifts to a more digital centred space, we expect the company to pursue revenue diversification strategies oriented towards this space. However, we are not confident in the company’s ability to adequately leverage digital channels to drive revenue growth.” reads the research note in part.
Nation Media Group is expected to diversify its revenue streams through ventures such as digital media, online gaming, music, and big data. The firm has taken some costing cutting measures in the past two years and Faida Investment Bank analysts predict it will maintain this trend.