Although the level of debt was of great concern, the company began to pay it down. By year-end 2010, debt was reduced to $2.5 billion, and the company was highly profitable and putting up better-than-expected numbers.
In September 2011, the company doubled its quarterly dividend from 4 cents a share to 8 cents. Just two quarters later, Gannett increased the dividend by 250%, to 20 cents. By then, debt was down to $1.4 billion, and the company was also buying back stock. GCI Long Term Debt data by YCharts The stock is now up 13 times the low point it hit back in 2009. Along the way, skepticism has remained in the markets and among analysts, and the company has traded at very low multiples at times. Perhaps newspaper companies deserve low multiples. But the announcement of yesterday's deal might finally deal with the perception of what Gannett really is. Even with yesterday's blistering performance, the stock yields 3%, and trades at about 11 times the 2014 consensus estimate, which does not yet include the potentially accretive nature of the acquisition. I believe that there also may be room for further dividend increases, but time will tell. At the time of publication the author held no positions in any of the stocks mentioned.Follow @JonMHellerCFAThis article is commentary by an independent contributor, separate from TheStreet's regular news coverage.