World Wrestling Entertainment (WWE) has a two-tiered dividend.
For regular investors, the company's dividend yield is a hearty 9.9%.
But the dividend is paid on a small percentage of shares outstanding. The McMahon family owns 88% of the stock. It gets a smaller dividend that yields 6.6%.
The wrestling entertainment company has struggled to entertain fans the past few years since its star Dwayne Johnson ("The Rock") left, Noble Research analyst Michael Kupinski says. That, he adds, seems to be changing, with improved story lines helping drive up attendance last quarter.
The past two quarters, the company posted profit growth of 170% and 71%, after three quarters of declining profit. So World Wrestling potentially could be a growth stock.
World Wrestling's expansion into China is one of the factors driving growth.
Starting in 2010, the firm's wrestling personalities will have a line of dolls made by Mattel (MAT). That too could drive up profitability.
There is also talk that WWE will create a cable network.
"From my viewpoint, it's 'How do you view yourself?' It's an identity crisis," Kupinski said. "You're a growth story, but you're paying a huge dividend, so you're a mature media company. You have to ask, 'What types of investors are you trying to attract to your stock?' "
Kupinski is a bit critical because he says the dividend is causing a cash strain. The WWE is giving back nearly everything it earns through its dividend, giving it little to reinvest in growth.
The stock is now back above its 10-week moving average. From August to September the stock traded tightly for six straight weeks.
