Nexstar Holds Dividend Steady, Eyes TEGNA Prize in Strategic Gamble

IRVING, TX – January 30, 2026 – Nexstar Media Group, Inc. (NASDAQ: NXST) announced today it will maintain its quarterly cash dividend at $1.86 per share, a decision that speaks volumes about its current strategic priorities. While the move provides a continued, handsome return to shareholders, it also signals a calculated pause in the company’s 12-year streak of dividend increases, redirecting financial firepower toward its pending, industry-shaping acquisition of TEGNA, Inc.

The dividend is payable on February 27, 2026, to shareholders of record as of February 13, 2026. In its announcement, Nexstar’s Board of Directors clarified that excess cash will be used to finance the acquisition and repay debt, framing the decision as a reflection of the company’s long-term financial strength and commitment to a monumental growth opportunity.

This strategic balancing act—rewarding current investors while pursuing a transformative merger—highlights the media giant's confidence in its ability to manage significant financial undertakings. The move aims to reassure the market of its stability even as it prepares to absorb a major competitor and take on additional leverage.

Navigating the Path to a Media Behemoth

The centerpiece of Nexstar's strategy is the $6.2 billion acquisition of TEGNA, a cash deal valued at $22.00 per share. The transaction, which received overwhelming approval from TEGNA shareholders in November 2025, is poised to cement Nexstar’s position as America's largest local television broadcasting group. However, the path to closing is not without its hurdles.

The merger is currently under intense scrutiny from regulatory bodies, including the Federal Communications Commission (FCC) and the Department of Justice (DOJ). With public comment periods having recently closed, the company is actively engaged in responding to inquiries, a process that has extended the closing timeline. Nexstar management has affirmed that it still expects the deal to be finalized in the second half of 2026.

Should the acquisition close, the combined entity would be a media powerhouse, boasting 265 full-power TV stations across 44 states and reaching approximately 80% of U.S. television households. The strategic rationale, as articulated by company leadership, is to create an entity with the scale to compete more effectively against “Big Tech and legacy Big Media companies.”

Central to the deal's financial appeal are the anticipated synergies. Nexstar projects it can realize approximately $300 million in annual net synergies, driven by operational efficiencies and cost reductions in the 35 markets where the two companies' station footprints overlap. This projection is backed by a strong track record, most notably the successful integration and debt reduction following its 2019 acquisition of Tribune Media.

A Disciplined Approach to Capital and Debt

By maintaining its dividend, Nexstar is making a powerful statement about its capital allocation philosophy. The company’s annualized dividend yield of 3.59%, based on its late January stock price, places it in the 78th percentile of all dividend payers in the S&P 400 index—a formidable position for a company on the verge of a major acquisition.

This policy stands in stark contrast to some industry peers. While Gray Television (GTN) currently offers a higher dividend yield, its payout ratio is significantly higher, raising questions about its long-term sustainability. Meanwhile, E.W. Scripps (SSP) is presently prohibited from paying dividends on common shares due to obligations related to preferred stock. Against this backdrop, Nexstar’s steady and substantial dividend, supported by a more moderate payout ratio of around 43%, appears both generous and prudent.

The financial discipline extends to its debt management strategy. Nexstar's net leverage ratio stood at 3.19x as of mid-2025. Upon closing the TEGNA deal, this is expected to increase to approximately 4x. However, the company has a clear deleveraging plan, intending to use the significant free cash flow generated by the combined entity to rapidly pay down debt. Management aims to return to its current leverage levels by 2028, following a playbook that has served it well in past acquisitions.

Reading the Signals: Investor Confidence and Market Outlook

The decision to hold the dividend steady while pursuing a multi-billion-dollar merger is a carefully crafted signal of confidence. It communicates to investors that Nexstar's underlying business is strong enough to both fund a transformative expansion and continue providing robust shareholder returns. The company projects the TEGNA acquisition will be highly accretive, boosting its standalone adjusted free cash flow by over 40% in the first year alone.

Wall Street analysts have taken notice. Earlier this month, Benchmark reiterated a “Buy” rating on Nexstar, naming it a “top pick for 2026” with a price target of $250. The firm’s analysis highlighted the potential for the TEGNA deal to “unlock substantial value,” while also noting that Nexstar’s shares offer significant upside even if the acquisition were to fall through.

The strategic value of the combined entity extends beyond simple cost savings. With an expanded portfolio of top network affiliates in key election markets, the company is well-positioned to capture a larger share of political advertising revenue. As regulators continue their review, all eyes are on Nexstar to see if it can successfully execute this complex financial maneuver and redefine its dominance in the national media market.