Media firms have ended the year with plenty of cash and offer investors scope for good returns, reckons City broker Numis.
It comes after a sustained period over the last five years where companies have been reducing debt, says analyst Gareth Davies, which sees the sector "moving up the risk dial" in 2013.
He also envisages a time of greater merger and acquisition activity and consolidation in the sector in the year ahead.
"We are cautiously optimistic on the macroeconomic outlook, and given modest current trading multiples relative to historic norms, underpinned by attractive dividend yields, we believe the sector currently offers a compelling balance of risk/reward," says the analyst.
Business to Business (B2B) groups are in good shape, he says, while in business to consumer (B2C) he prefers dual revenue national newspapers to regionals, while he is negative on directories.
The sector also enjoys exposure to fast-growing pure play firms, which are benefitting from the growth of online, he says, citing Blinkx, Perform and Rightmove.
In the professional and educational sub-sector, there continues to be a movement online, says Davies.
"We are cautious on the outlook for education as the industry migrates to a mixed ecology of print and online, and note continued pressure on budgets," he says.