Thomson Reuters (TSX: TRI): Should You Invest In This Media Stock?

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Summary

  • Reuters’ fourth-quarter revenue increased by 2 per cent.
  • Its revenues from news segment and global print witnessed a decline of 1 per cent and 10 per cent, respectively.
  • Current stock price is C$ 101.26 apiece as compared to its 52-week high of C$ 115.66 per piece.

 

Thomson Reuters Corporation (TSX: TRI) posted top line growth for the last quarter of 2020. Its revenue from Big 3 segments – legal, professionals, corporates, and tax and accounting professionals – increased by four per cent year-over-year (YoY).

The operating profit skyrocketed to US$ 956 million in Q4, a jump of 343 per cent YoY. This surge came on the back of its demerger from its former Financial & Risk (F&R) segment, which is now operated by the London Stock Exchange Group.

Revenue from the news segment dropped marginally by one per cent as media houses shut down operations and canceled subscriptions amid the pandemic.

Let us check out its financials and stock performance in detail:

 

Thomson Reuters Corporation (TSX: TRI)

 

The business service provider’ global print revenues fell 10 per cent to US$ 177 million, due to COVID-19 led lockdowns. Diluted earnings per share slumped by 53 per cent YoY to US$ 1.13 in Q4 2020.

Reuters raised its annualized dividend by US$0.10 per share and is distributing quarterly dividend of US$ 0.38 per piece. The stock holds a dividend yield of 1.985 per cent.

Image Source: Kalkine Group @2021

 

It has a current price of C$ 101.26, down from its 52-week high of C$ 115.66.

The return on equity is 17.46 per cent with a current market cap is C$ 50.34 billion.

The stock is down by approximately 3 per cent year-to-date (YTD).

 

Outlook 2021-2023

 

The company has projected an organic revenue growth between 5 per cent to 6 per cent in 2023. It expects to generate free cash flow in the range of US$ 1.8 billion to US$ 2.0 billion in 2023.

Thomson Reuters aims to investment between US$ 500 million and US$ 600 million for 2021 and 2022, respectively.


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