The Washington times., 1930-08-01
SOUND ISSUE,
H|SSTUDY
SHOWS
4 HW
Research Bureau Head Ends
Scanning Of Stock; Lauds
Its Many. Advantages
BY LEWIS HANEY
Director New York University Bureau of
'tBuslness Research and Former
r Economist 0f Federal Trade
Com rNlsslOn

= Economist 0f Fenefal lra0e
q Commission
NEW YORK, August AFTER
o careful study of the new stock
offered by Hearst Consolidated
Publications, Inc. I am glad to
say that I consider it a desirable
investment.
Not only is it a sound issue, but
1t offers certain desirable features
in the way of profit-sharing which
will appeal to investors who desire
q chance to make money through
an appreciation in price.
In the first place. the z per cent
preferred stock of Hearst Consoli-
dated Publications is safe.
The business is a long-estab-
lished, growing one. It includes
such outstanding newspapers as
New York Evening Journal, Chi
cago Evening American, Detroit
Times, Pittsburgh Sun.Telegraph.
San Francisco Examiner, San
Francisco Call-Bulletin. Oakland
Post Enquirer, Los Angeles Exam
liner, Los Angeles Herald, Seattle
Post Intelligencer, together with
the great American Weekly.
Thus it is territorially well di-
versified. 1t centerS in the great
metropolitan areas and may logf
cally be expected to grow with
them.
incidentally, there are valuable
tangible assets in the shape Of
real estate and equipment. The
plants of these companies are
modern and most Of them quite
new.
Speaking of growth, the figures
for the past four years show an
uninterrupted increase in gross
revenues from $64,264,000 in
1925 to $85, ,273, 900 in 1929.
The preferred stock is "pre-
ferred," both as to earnings and
assets lin case of dissolution
II is Cumulative" which means
that if a dividend were ever
passed, that amount would re-
main payable. Nothing can go
to the common stock until all div
idends are fully paid on the pre-
ferred.
But it seems very improbable
that this safeguard will ever be
needed, because the preferred
dividend is only a small part, of
total net earnings. The net in
creased from $4,000. 900 in 1926
to $12.854. 900 in 1929. 1t has
averaged we'll over three times the
requirements for preferred divi-
dends.
In addition to safety, there is
the chance to share in any extra
earnings. After the common
stock gets SITS share, the pre-.
ferred stockholders share with
them in any additional dividends,
up tto 3 per cent a share. This
feature is attractive. If the bust
ness continues to grow and pros
per, the preferred stockholders
may find themselves getting a
good deal more than per cent.
The bare chance of this will
give a higher market value to the
preferred stock.
Similar Z per cent preferred
stocks are now selling between
10 and 120 and yield only about
ST to 6 per cent. The new
Hearst issue is being brought out
at par ($25) and this yields 7
per cent. I can see no reason
why it should not correspond
ingly sell above 30-perhaps up
to IS.
Note, too, that this issue is
being offered to Hearst employees.
A company does not sell stock
to employees unless it is good, and
most such stocks have been very
good. This, together with the
fact that the stock comes out
during a period of deflation,
makes me think that the terms
have been made very fair and