All eyes are on CBS (NYSE:CBS). Why? Well, a juicy dividend hike and a splendorous stock buyback plan were announced yesterday, two events that usually are welcome news to investors.

First, there's the dividend increase. CBS used to pay $0.22 per share per quarter. Now, shareholders will receive $0.25 every three months. Three little pennies don't sound like a lot, right? Put it in percentage terms, though, and you've got a double-digit hike -- roughly 14%.

Onto the buyback -- it has a potential value of $1.6 billion. Furthermore, CBS would like to see this done at an accelerated pace. CEO Les Moonves is clearly high on the future prospects of his media assets. He appears confident in the company's ability to deliver sustainable free cash flows, and he appears willing to court long-term holders for CBS shares.

Fools who are interested in the media sector, as well as dividend investing, will definitely want to take a look at CBS. Not only would they gain exposure to excellent properties like Showtime, The CW -- a joint venture with Time Warner (NYSE:TWX) -- and publishing arm Simon & Schuster, they also would gain exposure to a stock yielding approximately 3.2% based on yesterday's close price. That's actually pretty impressive for a media business.

While I like the long-term potential of other media plays such as Lions Gate Entertainment (NYSE:LGF), News Corp. (NYSE:NWS), and Disney (NYSE:DIS), I have to concede that they aren't going to give you a nice payout while you wait. In fact, consider that big blue-chipper General Electric (NYSE:GE), owner of NBC, actually yields slightly less than CBS at 2.9%. CBS has now grown its dividend by almost 80% since the beginning of 2006.

But CBS can do that. According to the latest 10-K filing, CBS has grown its net cash flow from continuing operations the past few years. In 2004, 2005, and 2006, continuing operations provided $1.6 billion, $1.8 billion, and $2.0 billion of cash, respectively. Since CBS' capital expenditures aren't hefty, a significant portion of these sums are able to flow to the free side of things. Seeing CBS use a portion of that capital for a larger dividend and a share buyback spells good news for investors.

When Sumner Redstone decided to split his old Viacom (NYSE:VIA) conglomerate in two, the plan all along was for CBS to be the payout play. The plan has certainly come to fruition, and I think that, at the current yield, CBS is a great stock idea for those who want to own a media concern but don't want to bet on just capital appreciation.

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