Saga Communications Inc (NASDAQ: SGA)

Sector: Communication Services Industry: Broadcasting CIK: 0000886136
Market Cap 63.32 Mn
P/B 0.54
P/E 3.56
P/S 0.48
ROIC (Qtr) -0.39
Div Yield % 13.30
Rev 1y % (Qtr) -1.84
Total Debt (Qtr) 5.00 Mn
Debt/Equity (Qtr) 0.03
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About

SAGA Communications Inc., known by its ticker symbol SGA, is a prominent player in the media industry, specializing in the acquisition, development, and operation of broadcast properties. The company's portfolio includes 79 FM, 33 AM radio stations, and 80 metro signals, serving 27 markets as of February 29, 2024. SAGA Communications Inc.'s primary revenue source is the sale of advertising for broadcast on its stations. The company determines its advertising rates based on factors such as the station's audience appeal, the number of competing...

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Investment thesis

Bull case

  • Strong operating cash flow of 9.11M provides robust 1.82x coverage of total debt 5M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 9.11M provides exceptional 20.95x coverage of interest expenses 435000, showing strong debt service capability.
  • Strong tangible asset base of 107.64M provides 21.53x coverage of total debt 5M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 5.95M exceeds capital expenditure of 3.17M by 1.88x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 107.64M provides 3.37x coverage of working capital 31.95M, indicating strong operational backing.

Bear case

  • Operating cash flow of 9.11M barely covers its investment activities of (3.74M), with a coverage ratio of -2.44, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 9.11M provides thin coverage of dividend payments of (7.95M) with a -1.15 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • The company's operating cash flow of 9.11M shows concerning coverage of stock compensation expenses of 2.15M, with a 4.24 ratio indicating potential earnings quality issues.
  • Operating earnings of 765000 show weak coverage of depreciation charges of 5.34M, with a 0.14 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 5.34M relative to operating cash flow of 9.11M, which is 0.59x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Broadcasting
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NXST Nexstar Media Group, Inc. 8.26 Bn 23.87 1.67 6.40 Bn
2 TGNA Tegna Inc 4.06 Bn 7.22 1.41 2.59 Bn
3 SBGI Sinclair, Inc. 1.07 Bn 0.49 0.18 4.24 Bn
4 SSP E.W. SCRIPPS Co 0.81 Bn -7.98 0.35 2.74 Bn
5 IHRT iHeartMedia, Inc. 0.53 Bn -1.32 0.14 5.87 Bn
6 FUBO FuboTV Inc. 0.46 Bn 2.96 0.17 0.41 Bn
7 GTN Gray Media, Inc 0.23 Bn -7.34 0.80 5.68 Bn
8 NMAX Newsmax Inc. 0.20 Bn -2.81 1.18 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.44 0.87
EV to Cash from Ops. EV/CFO 3.29 -0.15
EV to Debt EV to Debt 19.02 6.39
EV to EBIT EV/EBIT 3.12 3.66
EV to EBITDA EV/EBITDA 2.56 3.24
EV to Free Cash Flow [EV/FCF] EV/FCF 3.88 7.40
EV to Market Cap EV to Market Cap 1.50 6.46
EV to Revenue EV/Rev 0.72 1.70
Price to Book Value [P/B] P/B 0.54 614.59
Price to Earnings [P/E] P/E 3.56 -1.43
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.04 -21.94
Dividend Payout Ratio % Div Payout % (Qtr) 2,000.00 114.41
Dividend per Basic Share Div per Share (Qtr) 1.00 0.74
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 103.73 23.53
Interest Coverage Int. cover (Qtr) 1.76 -1.29
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 23.81 19.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -14.34 18.99
Dividend Growth (1y) % Div 1y % (Qtr) -72.22 17.54
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -86.28 546.44
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -48.50 -17.28
EBIT Growth (1y) % EBIT 1y % (Qtr) -88.41 266.27
EBT Growth (1y) % EBT 1y % (Qtr) -94.78 -496.56
EPS Growth (1y) % EPS 1y % (Qtr) -93.33 -40.46
FCF Growth (1y) % FCF 1y % (Qtr) -20.10 25.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -22.95 3.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.51 0.48
Cash Payout Ratio Cash Payout (Qtr) 0.65 0.20
Cash Ratio Cash Ratio (Qtr) 0.93 0.41
Current Ratio Curr Ratio (Qtr) 2.74 1.64
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 2.17
Interest Cover Ratio Int Coverage (Qtr) 1.76 -1.29
Times Interest Earned Times Interest Earned (Qtr) 1.76 -1.29
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.40 -11.99
EBIT Margin % EBIT Margin % (Qtr) 0.68 -20.47
EBT Margin % EBT Margin % (Qtr) 0.29 -27.40
Gross Margin % Gross Margin % (Qtr) 14.50 34.96
Net Profit Margin % Net Margin % (Qtr) 0.30 -28.49