Nexstar Media Group Inc.

Overview Key strengths Key risks The company's reach of approximately 68% of U.S. households positions it as the largest non-network-owned television station group in the country. Potential debt-funded acquisitions could increase leverage to 4x-4.5x. Distribution revenue, currently around 51% of total revenue, provides revenue stability. Operating performance is susceptible to economic cyclicality because roughly 36% of revenue comes from advertising. Solid free operating cash flow of more than $1 billion annually. Uncertainty regarding the effect of secular shifts in advertising and subscriber revenue. Nexstar ended 2021 with net leverage of 3.8x (calculated on an average trailing eight-quarter basis). While the company's ability to pursue large television station acquisitions is limited given the current regulatory framework, we believe it could acquire

...We believe Nexstar Media Group Inc. is willing to tolerate leverage of 4x-4.5x for acquisitions. Nexstar ended 2021 with net leverage of 3.8x (calculated on an average trailing eight-quarter basis). While the company's ability to pursue large television station acquisitions is limited given the current regulatory framework, we believe it could acquire digital assets or other content-based businesses. We believe the company will also continue to actively pursue share repurchases after spending more than $500 million on them in 2021. Nexstar has also increased its dividend more than 20% annually for the past nine years and we expect the amount it spends on dividend payments will continue to increase. We expect distribution revenue, currently about 51% of total revenue, will remain stable. We believe Nexstar and other local television broadcasters will be able to increase retransmission rates for at least the next retransmission cycle (typically two to three...

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