WLYB - John Wiley & Sons: Closer But Not Yet
2024-02-17 07:42:14 ET
Summary
- John Wiley & Sons' shares have underperformed, down 6.8% compared to a 34% gain for the S&P 500.
- The company's financial history shows declining revenue and operating income, as well as increased long-term debt and interest expenses.
- While the dividend yield is similar to the risk-free rate, there is a risk that the dividend may be cut, making Treasury bonds a safer investment.
About 16 months, since I suggested people avoid John Wiley & Sons (WLYB) in an article with the monumentally creative title "Avoid John Wiley & Sons Inc." Since then, the shares are down a total of about 6.8% against a gain of 34% for the S&P 500. The fact that I sidestepped this underperformance is gratifying on some level, but it imposes on me a sort of obligation to return to the name. After all, a stock trading at $33.84 is a less risky bet than the same stock when it's trading at $38.50. So, I'm going to review the name again to see if this is a great entry price, because what was a terrible investment at $38.50 could potentially be a great investment at $33.84. I'll make that determination by reviewing the financials and by comparing this to the risk-free alternative. After all, a stock is a more risky investment than is a government bond, and for that reason, I think it's reasonable for stock investors to receive compensation that at least matches what they could receive from the 10 Year Treasury Note....
John Wiley & Sons: Closer But Not Yet