Dec. 7 at 5:29 AM
$WMG 3) Dividend & Cash Flow Coverage
Dividend yield 2.7%, but payout ratio 105% TTM is high on paper.
FCF TTM:
$539M, well above dividend obligations so their true coverage is solid.
Cash:
$532M; annual dividend burden =
$160M.
=> Despite high payout ratio, cash flow stability makes the dividend safe.
4) Analyst View: Clear Upside Skew
Average PT:
$38, +33% upside.
Max PT:
$46 (+61%).
Sentiment: 11 Strong Buys / 3 Buys / 6 Holds / 0 Sells.
=> Analysts overwhelmingly see stock undervaluation vs
$WMG cash generating ability.
5) The One Major Risk: Leverage + High Valuation
Total debt:
$4.61B, net debt
$4.08B.
EV:
$19B so enterprise valuation is heavily influenced by debt.
P/E: 40.1 is pricey for a slow revenue growth multiple.
=> High leverage + premium multiple means sentiment downturns hit harder.
6) Bottom Line
$WMG = a stable, content driven, cash flow compounder, trading near support
But still under longer term moving averages.
