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Value Investors: Buy This Stock to Double Your Money in 2020

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Corus Entertainment (TSX:CJR.B) is a media and content company and operates television networks and radio stations in Canada and internationally. It operates in two segments: Television and Radio. The Television segment operates 35 specialty television networks and 15 conventional television stations. The company was incorporated in 1998 and corporate headquarters are in Toronto.

The company has a price-to-earnings ratio of 7.58, a price-to-book ratio of 0.74, and market capitalization of $1.18 billion. Debt is very conservatively used at Corus, as evidenced by a debt-to-equity ratio of just one. The company has excellent performance metrics with an operating margin of 29.98% and a return on equity of 10.57%.

The company is also involved in the production and distribution of films and television programs, animation software, merchandise licensing, and book publishing activities. The company’s primary brands include Global Television, W Network, OWN: Oprah Winfrey Network Canada, HGTV Canada, Food Network Canada, History, Showcase, Adult Swim, National Geographic, Disney Channel Canada, YTV, and Nickelodeon Canada.

The Radio segment operates 39 radio stations that include a network of news-talk radio stations, classic rock, country, new rock, and contemporary music formats. The company also provides children’s animated content, digital content, and animation creation software.

In 2019, Corus announced a new multi-channel television package STACKTV, featuring 12 top-tier linear networks, as a part of Amazon Prime Video launch. In addition, Corus launched Nickelodeon, a subscription video-on-demand (SVOD) channel, featuring a combination of live action and animation. This new offering is available for $5.99 per month to Amazon Prime members in Canada.

The company also announced a new partnership with Complex Networks, a global media company with leading youth culture brands. Corus will serve as the exclusive ad sales partner for Complex Networks in Canada, licence content for use across linear and on demand platforms, jointly produce new original localized content, and expand Complex’s U.S. event business to Canada.

Corus also announced a partnership with Twitter, launching Twitter Originals, to run across Corus’s powerful portfolio of brands, across platforms. Further, the company also announced a global streaming deal with Netflix
for Canadian original series, Rust Valley Restorers, making it the first series from Corus to stream worldwide on Netflix.

The company’s brands and people were recognized at the 2019 Canadian Country Music Association Awards and Corus announced a lead media partnership for the New Media Stage at the 2019 Elevate Tech Festival, featuring leading youth culture brands and major players in the new media space.

Corus pays a quarterly dividend of $0.06 per share, and consolidated revenues increased 2% year over year, driven by continued strong performance in television advertising revenues, up 4% for the quarter and 7% for the year.

In 2019, the company’s profits were up 2% for the year, and Corus reported a healthy profit margin of 35%. Net income attributable to shareholders was $156.1 million for the year, and leverage ratios reduced due to the company’s debt repayments of $249.9 million. Free cash flow was $310 million for the year.

Corus Entertainment appears the be a great way for Canadian retail investors to gain portfolio exposure to Amazon, Netflix, Twitter, and Disney.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Nikhil Kumar has no position in any of the stocks mentioned. David Gardner owns shares of Amazon, Netflix, and Walt Disney. Tom Gardner owns shares of Netflix. The Motley Fool owns shares of and recommends Amazon, Netflix, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney and short January 2020 $130 calls on Walt Disney.

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