Liberty Global PLC (NASDAQ: LILAK) and Discovery Communications (NASDAQ:DISCA) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitabiliy and valuation.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Liberty Global PLC and Discovery Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Liberty Global PLC 0 0 2 0 3.00
Discovery Communications 4 13 1 0 1.83

Liberty Global PLC presently has a consensus target price of $35.00, indicating a potential upside of 75.70%. Discovery Communications has a consensus target price of $29.23, indicating a potential upside of 9.93%. Given Liberty Global PLC’s stronger consensus rating and higher possible upside, equities analysts plainly believe Liberty Global PLC is more favorable than Discovery Communications.

Profitability

This table compares Liberty Global PLC and Discovery Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Liberty Global PLC N/A N/A N/A
Discovery Communications 17.50% 23.67% 7.89%

Institutional and Insider Ownership

54.6% of Liberty Global PLC shares are owned by institutional investors. Comparatively, 44.6% of Discovery Communications shares are owned by institutional investors. 5.8% of Discovery Communications shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Liberty Global PLC and Discovery Communications’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Liberty Global PLC $3.33 billion 1.03 $1.29 billion ($2.74) -7.27
Discovery Communications $6.55 billion 1.80 $2.47 billion $1.91 13.92

Discovery Communications has higher revenue and earnings than Liberty Global PLC. Liberty Global PLC is trading at a lower price-to-earnings ratio than Discovery Communications, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Liberty Global PLC has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500. Comparatively, Discovery Communications has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500.

Summary

Discovery Communications beats Liberty Global PLC on 9 of the 13 factors compared between the two stocks.

Discovery Communications Company Profile

Discovery Communications, Inc. (Discovery) is a global media company. The Company provides content across multiple distribution platforms, including pay-television (pay-TV), free-to-air (FTA) and broadcast television, Websites, digital distribution arrangements and content licensing agreements. Its segments include U.S. Networks, which consists principally of domestic television networks and digital content services; International Networks, consisting primarily of international television networks and digital content services, and Education and Other, which consists principally of curriculum-based product and service offerings, and production studios. The Company’s portfolio of networks includes television brands, such as Discovery Channel, Animal Planet, ID, Velocity (known as Turbo outside of the United States) and Eurosport. It is also engaged in extending content distribution across various platforms, including brand-aligned Websites, Web-native networks and online streaming.

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