Some media stocks have had a pretty strong couple of months lately. They were boosted by the US Presidential elections, which resulted in increased political ad spending. The best media stocks to invest in have been Sinclair Broadcast Group and Nexstar Media Group. Both have almost doubled in price since November 2020. Nexstar is the largest television station operator in the US, with a meaningful presence in 116 markets. Sinclair Broadcast Group is the second-largest television station operator in the US, with a presence in over 100 markets. If you are an investor looking at media stocks, then these two are prime candidates.
Nexstar Reports Bumper Earnings Growth In Q42020
The fourth quarter of 2020 has been a good one for Nexstar Media Group. Revenue was up 37% year-on-year, from $561 million in Q42019 to $771 million in Q42020. While core advertising revenue was down almost 10%, the political advertising revenue was up 8X. That alone was the driving factor for the massive jump in revenue. Distribution fee revenue was also up 18.4%. Net income also more than tripled from $113 million to $362 million. Such results are the reason that Nexstar is among media stocks to invest in.
Nexstar CEO Perry Sook said, “The 25% rise in fourth-quarter net revenue and 107% increase in operating income over the prior year highlight the ongoing value of our strategies focused on leveraging our local content and community involvement to generate record ad revenue and share in our markets as well as develop high teens distribution revenue growth. Our ability to capture historic levels of election spending in our markets, which also substantially exceeded our 2020 guidance, combined with the strong operating leverage in our business model drove record fourth-quarter adjusted EBITDA and free cash flow.”
Nexstar Media Group’s stock has gained 20% from 9th February 2021 to 8th March 2021. The stock last traded at $151.53 on the close of the trading day on 8th March 2021. The stock has trebled since hitting a low in March 2020.