Gannett Cuts Dividend 90 Percent; So Much for the 44 Percent Yield
Surprising no one, Gannett (GCI) this afternoon cut its quarterly dividend rate to four cents from 40 cents, a reduction of 90 percent.
The publisher of USA Today and other newspapers said the move is “another prudent response to the full-fledged recessions in the U.S. and the U.K. and the continuing difficulties in the credit market.” Gannett says the move will free up $325 million in cash to pay down debt.
I would note that at the old rate, GCI shares had a yield of 44 percent. And of course, the only time stocks offer a yield of 44 percent is when investors know the current rate isn’t going to last.