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Gannett Cuts Dividend 90 Percent; So Much for the 44 Percent Yield

Published on February 25, 2009
by Eric Savitz

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.

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