On Madison Avenue, Nielsen is known for making media audience estimates and other forms of consumer research. On Wall Street, it is known for making money -- for its investors. The media and marketing research giant this morning announced a new “capital allocation” program that will use its profits and strong cash position to make its stockholders even richer, especially the big private-equity companies that bankrolled its initial public offering.
The new capital plan includes a 25% increase in the quarterly cash dividend Nielsen plans to pay its shareholders on Sept. 11, as well as a plan to “repurchase” $500 million of common stock.
Nielsen said the stock buyback plan is being implemented to “mitigate dilution” related to its equity compensation plans -- which is ironic, given that Nielsen recently completed a secondary offering of 40.3 million shares of new common stock that raised more than a billion dollars for its “sponsor” shareholders, who continue to hold 41% of Nielsen’s shares.
While Nielsen announced only low single-digit revenue growth for its second-quarter earnings, the company is in a strong cash position following the recent sales of its conferences and exhibitions business.Nielsen has scheduled a conference call to discuss its earnings and its new capital plan, and to update investors on its planned acquisition of Arbitron, which is still undergoing regulatory approval.