1 Great Dividend You Can Buy Right Now

Dividend stocks are everywhere, but many just downright stink. In some cases, the business model is in serious jeopardy, or the dividend itself isn't sustainable. In others, the dividend is so low it's not even worth the paper your dividend check is printed on. A solid dividend strikes the right balance of growth, value, and sustainability.

Today, and one day each week for the rest of the year, we're going to take a look at one dividend-paying company that you can put in your portfolio for the long term without much concern. This isn't to say that these stocks don't share the same macro risks that other companies have, but they are a step above your common grade of dividend stock.

This week we're going to take a look at media and advertising company Meredith (NYS: MDP) .

I'm fully aware that it must be odd to see me highlighting a media company after throwing these under the bus for years, but Meredith appears to be of a different breed of media company in that it actually cares about its investors.

For most media companies, the advertising landscape is awful -- there's no way to sugarcoat it. Rising raw material costs, cost-conscious consumers, and a continued move from print to digital advertising has constrained growth.Gannett (NYS: GCI) reported a 5% drop in publishing revenue and a 14% drop in broadcasting revenue. Similarly, Time Warner Cable (NYS: TWC) noted a 10% drop in advertising revenue in its latest quarterly filing. Even Yahoo!, which generates its revenue online, has seen revenue fall for 13 straight quarters.

Meredith has suffered as well -- but the outlook for this company shines above the rest. Although its second-quarter results demonstrated a 14% drop in advertising revenue, the company is making remarkable strides at transitioning to a digital platform and creating alternate sources of revenue.

For starters, Meredith extended its partnership through 2016 with Wal-Mart (NYS: WMT) to sell its Better Home and Garden brand of products. The company is also aggressively expanding its online presence. It recently acquired Allrecipes.com, the world's largest recipe website, allowing it access to 100 million users and effectively doubling the size of its Women's Network. The deal is expected to be accretive to earnings beginning in 2013.

We also have to remember that Meredith's fiscal 2011 second-quarter results include political-ad revenue of $22 million, which it did not have this year.

Even the company's print business continues to perform well. According to data from Mediamark Research and Intelligence, Meredith's total magazine readership reached a record 113 million during the quarter, with visits to its websites increasing by 50%, to 20 million.

But the best aspect about Meredith is the way that it consistently gives back to its shareholders. In the first quarter Meredith announced a $100 million share repurchase program and boosted its quarterly dividend by 50%. Meredith has been an income investor's best friend since 2000, having boosted its dividend 11 times in that period. Take a look at this phenomenal dividend growth:

Source: Dividata.

Based on Meredith's estimated 2012 payout, the company has grown its dividend by 13.9% annually over the past 12 years.

Foolish roundup
From a valuation perspective there's a lot about Meredith that makes sense. Valued under 12 times forward earnings and yielding 4.5%, it is arguably one of the best income-to-value stocks in the media sector. Best of all, its payout ratio is still just 46%, which leaves plenty of room for continued dividend increases. Meredith may not be the sexiest stock on the block, but it offers some of the best perks in the media sector.

If you're craving even more dividend ideas, I invite you to download a copy of our latest special report, "11 Rock-Solid Dividend Stocks," which is loaded with income-producing companies hand-selected by our top analysts. Best of all, this report is free, so don't miss out!

At the time thisarticle was published Fool contributorSean Williamshas no material interest in any of the companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong. The Motley Fool owns shares of Wal-Mart.Motley Fool newsletter serviceshave recommended buying shares of Wal-Mart and Yahoo!, as well as creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policythat always loves a free payout.

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