Townsquare Media Inc: Does Overlooked 11%-Yielder Have 108% Upside?
April 11, 2025
Townsquare Increases Quarterly Payout
Today’s top income pick, Townsquare Media Inc (NYSE:TSQ), is an overlooked and beaten-down high-dividend-yielding stock with a lot of great potential.
TSQ stock is down on two levels. Before President Donald Trump announced his tariffs and global markets cratered, the stock was down 10% in 2025 and 27% on an annual basis. Fast forward several days, and TSQ stock is now down 22% this year and 42% over the last 12 months. Yes, on April 9, President Trump announced that he was pausing tariffs for most countries for 90 days, and stocks ripped higher, but by the next day, the trade war sell-off had resumed.
Even before fears of a global slowdown erupted, Townsquare Media’s underperforming stock masked a lot of positive things happening at the New-York-based media company.
The company just reported solid fourth-quarter and full-year results.
It swung to fourth-quarter profitability, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased almost 26%.
For the full year, Townsquare generated strong cash flow from operations, retired approximately $36.0 million worth of its senior secured notes, and repurchased $24.0 million worth of its own common stock. It also just increased its quarterly dividend payout to $0.20 per share.
On top of that, Townsquare Media successfully completed the refinancing of its debt, entering a new $490.0-million credit agreement, including a $470.0-million term loan B and a $20.0-million revolving credit facility, both due in 2030.
Looking ahead, management is confident that the company will continue to deliver attractive returns to its shareholders in the form of a high-yielding dividend. It also plans to focus on Townsquare Media’s financial health by reducing net debt levels through strong cash generation and debt reduction.
In light of President Trump’s tariffs, we’ll have to see if management provides an update on its 2025 outlook.
With all the good things going on at Townsquare Media, perhaps we shouldn’t be surprised that Wall Street analysts expect TSQ stock to rally more than 100% over the coming quarters to $15.00 per share. Although that robust guidance could also change over the coming weeks/months.
About Townsquare Media Inc
Townsquare Media Inc operates as a digital and broadcast (radio) media and digital marketing company for small- and medium-sized businesses in the U.S. It has three operating divisions: Digital Advertising, Subscription Digital Marketing Solutions, and Broadcast Advertising. (Source: “March Investors Presentation,” Townsquare Media Inc, last accessed April 2, 2025.)
One of its assets is Townsquare Interactive, a digital marketing services subscription business providing websites, search engine optimization, social platforms, and online reputation management for approximately 21,900 businesses.
Townsquare IGNITE, another one of the company’s assets, is a proprietary digital programmatic advertising technology with an in-house demand and data management platform.
Townsquare Media holds a portfolio of 344 local radio stations in 67 cities, with corresponding local news and entertainment websites and apps.
It’s actually the only local media company focused solely on markets outside the top 50. These stations reach 50% of adult listeners in each of Townsquare’s AM/FM local markets and have an average market population of approximately 300,000.
While some may think radio is dead, it’s important to keep in mind that not everyone wants to listen to the top 50. In fact, many regional stations are starved for regional radio content. This comes in part due to the fact that, since 2004, roughly 2,100 newspapers have closed in the U.S., plus more than 100 local newsrooms closed during the 2020 health crisis.
Townsquare Media’s on-air personalities are digital creators and local social influencers, creating approximately 20,000 pieces of local content each and every month. The company is one of the largest producers of local content in the U.S.
Some of its broadcast properties include legendary brands such as WYRK.com and WJON.com, along with a network of national music brands such as TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com.
Being a local “digital marketing first” media company is the right fit for Townsquare. In 2024, radio advertising accounted for four percent of all advertising dollars spent in the U.S., while digital advertising solutions contributed 70%.
Digital revenue at Townsquare has grown 13% on an annual basis, growing from $88.0 million in 2016 to $234.0 million in 2024. Looking ahead, it is estimated that the company’s digital advertising will grow to 80% of all advertising spend in 2029.
Delivers Q4 Net Revenue & Adjusted EBITDA Growth
Fourth-quarter net revenue increased by $3.0 million, or 2.6% on an annual basis, to $117.8 million. (Source: “Townsquare Delivers Net Revenue and Adjusted EBITDA Growth in Q4 2024 Announces Increase in Dividend,” Townsquare Media Inc, March 17, 2025.)
The company’s Digital Advertising division’s revenue rallied 15.5%, or $5.6 million, while its Subscription Digital Market Solutions division’s net revenue inched up $2.4 million, or 1.9%. These increases were partially offset by a 4.1% decrease, or $2.4 million, in the Broadcast Advertising division’s net revenue.
Townsquare reported fourth-quarter net income of $25.0 million, or $1.42 per share. This was a big improvement over its fourth-quarter 2023 net loss of $1.8 million, or a loss of $0.14 per share. Its adjusted net income per diluted share was $0.60, compared to $0.34 per share in the same prior year period.
The company’s fourth-quarter adjusted EBITDA increased 25.8% to $31.2 million, as compared to $24.8 million in the same prior-year period.
Its full-year net revenue slipped 0.7% year over year to $451.0 million. For 2024, Townsquare reported a net loss of $10.9 million, or a loss of $0.81 per share. This was an improvement over a 2023 net loss of $43.0 million, or a loss of $2.68 per share. Its full-year adjusted net income was $1.09 per share, down from $1.40 per share in 2023. The company’s full-year adjusted EBITDA increased 0.4% to $100.4 million.
Townsquare ended the year with $33.0 million in cash and cash equivalents and $467.4 million in debt.
Commenting on the results, Bill Wilson, the company’s chief executive officer, said, “I am pleased to share that Townsquare’s performance improved meaningfully throughout 2024, culminating with fourth quarter net revenue growth of +2.6% year-over-year, and Adjusted EBITDA growth of +25.8% year-over-year, driven by the strong sequential improvement in our two digital businesses and the benefit of political revenue.”
Quarterly Dividend Upped to $0.20/Share
Thanks to its strong cash generation, which included $49.0 million in free cash flow from operations, Townsquare Media was able to increase its quarterly dividend payout to $0.20 per share, or $0.80 per share on an annual basis, for a forward yield of 11%.
Wilson had this to say about the dividend: “The Board’s decision to once again increase the dividend reflects their ongoing confidence in our free cash flow generation and our differentiated Digital First business strategy. Our quarterly cash dividend of $0.20 per share, or $0.80 per share on an annual basis, reflects a +1.3% increase from the prior dividend, which we had previously raised by +5%.”
Again, thanks to its recent strong cash generation, Townsquare has been able to increase its dividend, but that hasn’t always been the case. The company suspended its dividend in 2020, only reinstating it in 2023. The payout has been on the rise since then though.
Chart courtesy of StockCharts.com
The Lowdown on Townsquare Media Inc
Townsquare Media Inc is a local digital-first media company focused on areas outside the top 50 market in the U.S. It has a strong balance sheet, reported solid fourth-quarter and full-year results, recently retired approximately $36.0 million worth of its senior secured notes, repurchased $24.0 million of its own common stock, and just increased its annual dividend.
Moreover, thanks to strong cash generation, management expects Townsquare to continue to provide investors with a reliable, high-yielding dividend and to reduce its debt.
That’s good news for the 113 institutions that hold 58.0% of all outstanding TSQ shares. Some of the top holders include BlackRock Inc., The Vanguard Group, and Renaissance Technologies LLC. (Source: “Townsquare Media, Inc. (TSQ),” Yahoo! Finance, last accessed April 2, 2025.)
