Meredith Corporation (MDP) has entered into a 10-year deal under which it will be responsible for the advertising, sales, circulation, and production of Martha Stewart Living and Martha Stewart Weddings magazines by Martha Stewart Living Omnimedia or MSLO (MSO) effective Nov 1, 2014. Meredith will also handle the sales and marketing of the magazines' websites and digital assets, while the responsibility of social media channels will be retained by MSLO.

As per Mediamark Research Institute, Martha Stewart Living, which is published 10 times a year, has a rate base of 2 million with readership exceeding 10 million (comprising 1.75 million millennial women). On the other hand, the data compiled by comScore indicates that Martha Stewart's digital assets witness an average 8 million monthly unique visitors. Martha Stewart Weddings, which holds a dominant position among bridal magazines, is published every quarter.

According to MSLO, the accord would help in augmenting operating income by $10 million to $15 million annually, while it will benefit Meredith's bottom line for the second half of fiscal 2015 and fiscal 2016.

Meredith informed that it will conduct the marketing activities for MSLO’s magazines along with its premium brands, Better Homes and Gardens, Parents, Allrecipes and Traditional Home. The recent deals add to Meredith’s list of alliances, launches and acquisitions. In the past, the company acquired Every Day with Rachael Ray and assets of FamilyFun magazine. It also acquired the world's No. 1 digital food site, Allrecipes.com to expand its digital platform. The company also had acquired the Eating Well, Parenting and Baby Talk brands in a span of three years.

Moreover, with a view to target the Hispanic population in the United States, the Des Moines, IA-based publishing giant, Meredith is slated to launch an English magazine, Parents Latina, in spring 2015. The company also has a strategic alliance with Wal-Mart Stores Inc. (WMT) for expanding Better Homes and Gardens-branded home decor and the garden program at Wal-Mart stores across the United States and Canada.

Currently, Meredith carries a Zacks Rank #4 (Sell).

Stocks to Consider

Better-ranked stocks include 51job Inc. (JOBS) and Martha Stewart Living Omnimedia. Both carry a Zacks Rank #2 (Buy).

Read the Full Research Report on WMT
Read the Full Research Report on MDP
Read the Full Research Report on MSO
Read the Full Research Report on JOBS


Zacks Investment Research