For growth investors, finding a speculative stock in today’s market isn’t really that difficult. Indeed, a quick search of social media will provide retail investors with a seemingly endless list of ideas.
However, among smaller-cap Canadian stocks, Corus Entertainment (TSX:CJR.B) is one such high-risk speculative stock that may be worth considering right now. Currently, Corus stock is up more than 25% year to date, as investors bid up shares of this beaten-up stock.
Let’s dive into why Corus Entertainment may be an intriguing choice for investors with more aggressive risk profiles right now.
Impressive Q4 results
One of the reasons this otherwise speculative stock has outperformed of late is Corus’s rather impressive results.
This past quarter, the Toronto-based entertainment conglomerate with holdings in major radio, television and publishing industries reported better-than-expected results. The company brought in quarterly revenue of $361 million, beating expectations of $318 million by a rather wide margin.
For the company’s television segment, which includes channels like Global Television, HGTV Canada, W Network, Food Network Canada, radio stations, and specialty television services, revenue came in at $336 million compared to $299 million for the same period the year prior. That’s some solid growth.
The company states that on an adjusted basis, it has earned $0.10 per share this past quarter. That is lower than the adjusted EPS of $0.16 in the year-ago period. However, Q4 EPS is slightly higher than analyst estimates of $0.09 per share.
On the whole, these results were extremely encouraging for investors in this value name. The company’s price-to-earnings ratio dropped below seven on the release.
Hulu Deal could boost this speculative stock
On top of the company’s solid quarterly results, there is another reason why analysts are bullish on Corus stock. Corus recently announced that the company is entering a deal with U.S.-based streaming service Hulu. This deal will allow Corus studios to distribute more than 200 episodes across various genres.
Although the financial details are yet to be disclosed, Corus thinks that this multi-year deal is nothing less than a breakthrough for the company. However, some details about the programs and shows have come out. The deal includes distribution rights for shows like Save my Reno, Big Food Bucket List, Backyard Bills, and more.
Analysts believe this deal could alter how traditional investors view the stock and may prove to be massive for the company. The CEO of Corus Entertainment believes that the company is in a better position to compete with streaming services.
Bottom line
Corus Entertainment stock trades at a highly attractive valuation. It is trading at around five times its free cash flow with a current share price of $5.63. Moreover, this stock comes with an attractive dividend yield of more than 4%.
With high growth prospects, stable earnings, decent fundamentals and high dividend pay, Corus is a suitable pick for those looking to invest in high-risk, speculative plays. In addition, Corus is also a top value stock on the Canadian market.
