Key Takeaways
💸 Graham Holdings offers a low but highly secure dividend yield of 0.75%, with a payout ratio under 5% and consistent, gradual increases supported by strong free cash flow.
📈 Operating cash flow reached $451.9 million over the trailing twelve months, with free cash flow at $374.8 million, highlighting the company’s solid ability to fund operations and shareholder returns.
📊 Analyst sentiment remains cautiously optimistic with a consensus price target around $785 and recent rating adjusted from “strong buy” to “buy” based on near-term earnings softness.
Last Update 5/8/25
Graham Holdings Company (NYSE: GHC) is a diversified conglomerate with operations spanning education, healthcare, broadcasting, manufacturing, and automotive retail. Formerly The Washington Post Company, it has evolved into a steady performer under a disciplined management team that emphasizes long-term growth and capital efficiency. With strong free cash flow, low payout ratios, and a conservative balance sheet, it offers reliability backed by real earnings.
In recent quarters, the company has seen strength in healthcare and education, offsetting challenges in broadcasting and automotive. Its stock has gained over 26% in the past year, trades below book value, and maintains a modest dividend with room for growth.
Recent Events
In the latest quarter ending March 31, 2025, Graham Holdings reported revenue of $4.8 billion, a modest 1.2% increase from the same period a year ago. It’s not the kind of number that turns heads, but that’s not the goal here. GHC isn’t trying to dazzle—it’s staying consistent. Net income for the trailing twelve months came in at nearly $620 million, which translated into earnings per share of $141.16. That’s a substantial figure, even with the noted 80.8% decline in quarterly earnings growth year over year.
The drop in earnings looks dramatic but doesn’t necessarily signal distress. There’s more going on beneath the surface—tougher comparisons to previous quarters, timing shifts in some segments, and the inherent lumpiness that comes with being a diverse conglomerate. The company continues to generate strong cash flow and has over a billion in cash on its books, giving it plenty of flexibility to navigate bumps without sacrificing shareholder value.
Meanwhile, GHC’s market cap now sits around $4.2 billion, and the stock has quietly climbed over 26% in the past year. It recently closed at $964, comfortably above its 50-day and 200-day moving averages. Investors aren’t rushing the gates, but those who’ve been watching are starting to notice the steady hand at the helm.
Key Dividend Metrics
📈 Forward Annual Dividend: $7.20 per share
💸 Forward Yield: 0.75%
🧮 Payout Ratio: 4.93%
📅 Next Dividend Date: May 8, 2025
🔔 Ex-Dividend Date: July 17, 2025
📊 5-Year Average Yield: 1.03%
💼 Dividend Safety Rating: High (based on metrics)
🔄 Last Dividend Increase: Slight but consistent
Dividend Overview
Graham Holdings isn’t trying to win over income investors with a high yield. At 0.75%, it’s easy to overlook if you’re only sorting stocks by dividend payouts. But that’s only scratching the surface.
The real story is how little of its earnings the company uses to pay that dividend. A payout ratio under 5% is incredibly conservative, signaling a company that doesn’t feel the need to impress the market with aggressive distributions. Instead, it invests back into its businesses, which helps drive value in more durable ways.
With over $669 million in free cash flow last year and only about $24 million needed to cover dividend payments, the dividend is barely a blip on the radar for Graham Holdings’ cash management. That’s not just sustainable—it’s bulletproof.
This kind of dividend discipline is rare and shows that the company is putting long-term shareholder health over short-term market optics.
Dividend Growth and Safety
Graham Holdings has taken a slow, measured approach to raising its dividend over time. The increase from $6.96 to $7.20 per share this year might not sound impressive, but it fits the company’s pattern—modest growth, backed by real numbers.
That growth is underpinned by some solid financial fundamentals. Net profit margins are nearly 13%, and returns on equity are just shy of 15%. These aren’t signs of a company struggling to support its dividend—they’re signals of strength.
The company’s debt levels are also very manageable. With a debt-to-equity ratio of just over 32% and a current ratio of 1.62, there’s no looming financial pressure that could force cuts or disrupt payments. Add in the fact that GHC trades at less than 7 times earnings and under 1 times book value, and you start to get a clearer picture of value hiding in plain sight.
Graham Holdings doesn’t feel the need to chase yield or use dividends as a marketing tool. That’s part of what makes it attractive to long-term investors who understand the value of safety and consistency over flash.
Cash Flow Statement
Graham Holdings has shown strong and improving cash generation over the trailing twelve months, with operating cash flow rising to $451.9 million—its highest level in the last five years. This upward trajectory, from just over $202 million in 2021, speaks to better profitability and more efficient operations across its portfolio. Despite this strength, the company continues to invest meaningfully in its business, with capital expenditures of $77.1 million during the same period. That still left it with $374.8 million in free cash flow, a substantial improvement over previous years and a sign of solid internal capital generation.
On the financing side, the company has become more aggressive with capital returns and balance sheet management. GHC repaid $83 million in debt and returned another $97.5 million to shareholders through stock repurchases. At the same time, it issued $113.5 million in new debt, likely to support longer-term flexibility or capitalize on opportunistic investments. Overall, even with outflows in both financing and investing, the company ended the period with over $206 million in cash. It’s a conservative, cash-rich setup that provides a cushion and optionality—hallmarks of Graham Holdings’ long-term approach.
Analyst Ratings
Graham Holdings (NYSE: GHC) has recently seen a slight shift in sentiment from the analyst community. One notable adjustment came with a change in rating from “strong buy” to “buy” 📉. This move wasn’t based on any single alarming factor but rather a more tempered outlook on short-term earnings, particularly after the company reported a sharp year-over-year drop in quarterly net income. While not ideal, the downgrade reflects a cautious approach rather than a loss of confidence.
Despite the softer tone, the company’s fundamentals are still earning respect. Analysts continue to highlight Graham Holdings’ strong free cash flow position 💵, conservative debt levels, and its history of smart capital allocation as reasons to maintain a positive long-term view. The consensus 12-month price target currently stands around $785 📊, with estimates spanning a relatively tight range from $772.65 to $803.25. That signals steady institutional confidence, even if near-term upside may be limited.
The overall message is clear: GHC may not be a high-flyer, but it’s seen as reliable and undervalued. For long-term investors who value discipline and real earnings over flash, the recent rating adjustment doesn’t change the broader story.
Earning Report Summary
Graham Holdings kicked off 2025 with a solid first quarter, delivering results that reflect both its diverse operations and a few financial curveballs. Revenue came in at $1.17 billion, which was just a slight bump from the year before. Nothing flashy, but the kind of consistent growth that feels very on-brand for a company like this. Education and healthcare were the big contributors this time around, keeping things on track even as some other areas, like broadcasting and automotive, saw a bit of a pullback.
Operating Performance
Operating income saw a meaningful jump, climbing to $47.5 million from $35.4 million a year earlier. That’s a solid improvement and was mostly powered by strength in the education, manufacturing, and healthcare segments. The TV business and the car dealerships didn’t have the same luck—each of those segments posted an 8% decline in revenue. Still, the stronger areas were enough to keep the overall picture positive on the operational front.
Net Income and Adjustments
Now here’s where things get interesting. Net income dropped sharply, landing at $23.9 million, or $5.45 per share. That’s down from $124.4 million, or $27.72 per share, in the same quarter last year. But the dip wasn’t about poor business performance—it was mostly due to a large interest expense tied to a fair value adjustment on a noncontrolling interest in the company’s healthcare group. Strip that out, and the adjusted net income actually edged a little higher, reaching $51 million, or $11.64 per share. That’s a touch above last year’s adjusted numbers.
Segment Highlights
Healthcare was the standout this quarter. Revenue in that segment jumped 36% to $173.7 million, thanks to continued growth in home health and hospice services. Education also held steady, pulling in $424.7 million in revenue. Kaplan Higher Education played a big part in keeping that division moving forward.
Capital and Buybacks
The company remained active on the capital side too. It repurchased nearly 4,000 shares of its Class B stock for about $3.5 million. There’s still room under its current buyback program, so that could continue if management sees the value. As for liquidity, Graham ended the quarter with $1.11 billion in cash, marketable securities, and investments. That’s stacked up against $864.6 million in total debt—a position that offers a lot of flexibility.
Looking Ahead
Management didn’t offer dramatic forecasts but emphasized that the focus remains on strengthening its core businesses. The mix of industries in its portfolio gives Graham Holdings a lot of levers to pull. While a few segments are facing headwinds, others are showing real momentum. All in all, it was a steady, measured quarter with a few one-time financial items that skewed the bottom line more than they changed the actual health of the business.
Management Team
Graham Holdings Company is led by a leadership team that balances operational precision with a long-view approach to growth. Timothy J. O’Shaughnessy serves as President and Chief Executive Officer. Since stepping into the role in 2014, he’s been steering the company through its transformation from a newspaper publisher to a multi-industry holding company. His background in digital media and strategic innovation continues to influence the company’s forward-thinking direction.
Andrew Rosen oversees the company’s education arm as Chairman and CEO of Kaplan, Inc. He has been deeply involved in the development of Kaplan’s global operations and is a key driver of its long-term strategy. Jake Maas, Executive Vice President, has played a significant role in corporate development and strategic investment decisions. The company’s Chief Financial Officer, Wallace Cooney, brings a steady hand to the financial operations, helping maintain Graham’s consistent cash flow and conservative balance sheet management.
The board of directors includes Donald E. Graham, former publisher of The Washington Post, who remains deeply involved as Chairman. His steady influence and decades of leadership experience help maintain the company’s guiding principles of long-term stewardship and shareholder alignment.
Valuation and Stock Performance
Graham Holdings has delivered quiet but steady gains for its shareholders. Over the last year, the stock has climbed around 26 percent, significantly outpacing the broader market. This performance reflects growing investor confidence in the company’s diversified business structure and disciplined management.
From a valuation standpoint, Graham continues to look appealing. It trades at a price-to-earnings ratio near 6.8, far below many industry peers. That kind of discount is notable, especially given the company’s reliable earnings and strong balance sheet. Its price-to-book ratio sits just under 1.0, which essentially means the stock is trading close to the value of its underlying assets. That’s not something you see often in a market where investors frequently pay premiums for growth stories with far less stability.
Analyst sentiment reflects this steady but cautious optimism. The consensus 12-month price target hovers around $785, with estimates clustering between $772 and $803. While not explosive, the range implies moderate upside and acknowledges the company’s underlying strength without ignoring sector-specific challenges.
Risks and Considerations
Graham Holdings is a diversified company, which helps spread risk, but it’s not immune to industry-specific headwinds. Its education division, primarily through Kaplan, operates in a space that’s tightly regulated and sensitive to policy changes. Shifts in student loan policies, accreditation, or funding rules could affect performance in that segment.
The healthcare businesses, particularly those focused on home health and hospice services, are also exposed to regulatory shifts and reimbursement rate changes. While these sectors have growth potential, they come with their own complexities and oversight requirements.
The company’s broadcasting operations face ongoing pressure from the migration to digital media. As audiences continue to move away from traditional television, ad revenue and viewership may see further declines. This will require continued reinvestment and innovation to stay relevant.
Its automotive retail operations, though profitable, are more cyclical. Vehicle availability, consumer demand, and macroeconomic conditions can quickly shift the tone in that segment. Rising interest rates, for example, can reduce financing activity and shrink profit margins.
Graham’s exposure to international markets, particularly through Kaplan’s global footprint, also introduces currency volatility and geopolitical risks that can be difficult to predict or hedge against. While the company has shown skill in navigating these dynamics, it’s something investors should keep on their radar.
Final Thoughts
Graham Holdings offers a different kind of investment experience. It’s not flashy, and it doesn’t chase trends. Instead, it delivers consistent execution, solid fundamentals, and a leadership team that doesn’t get distracted by short-term market pressures. That approach has served it well across decades and continues to provide a reliable platform for growth.
The stock’s valuation remains reasonable, even after its recent run. It’s supported by a portfolio of durable businesses, healthy free cash flow, and a management team that knows how to allocate capital without overreaching. Whether through measured buybacks, careful M&A activity, or continued investment in core operations, the company keeps its focus where it should be—on long-term value creation.
While no investment is without risk, Graham Holdings’ conservative posture, strong balance sheet, and diversified income streams make it a compelling option for investors who prioritize substance over speculation. For those seeking a steady hand in a noisy market, this company continues to quietly make its case.