Graham Holdings Company (NYSE: GHC) and New Media Investment Group (NYSE:NEWM) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Earnings and Valuation

This table compares Graham Holdings Company and New Media Investment Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Graham Holdings Company N/A N/A N/A $26.95 22.29
New Media Investment Group $1.26 billion 0.56 $141.21 million $0.51 26.10

New Media Investment Group has higher revenue and earnings than Graham Holdings Company. Graham Holdings Company is trading at a lower price-to-earnings ratio than New Media Investment Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

74.7% of Graham Holdings Company shares are held by institutional investors. Comparatively, 76.3% of New Media Investment Group shares are held by institutional investors. 22.5% of Graham Holdings Company shares are held by company insiders. Comparatively, 5.3% of New Media Investment Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Graham Holdings Company and New Media Investment Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Graham Holdings Company 0 0 0 0 N/A
New Media Investment Group 1 2 1 0 2.00

New Media Investment Group has a consensus target price of $17.33, indicating a potential upside of 30.23%. Given New Media Investment Group’s higher probable upside, analysts plainly believe New Media Investment Group is more favorable than Graham Holdings Company.

Volatility & Risk

Graham Holdings Company has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, New Media Investment Group has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Profitability

This table compares Graham Holdings Company and New Media Investment Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Graham Holdings Company 6.17% 6.06% 3.41%
New Media Investment Group 1.82% 4.19% 2.30%

Dividends

Graham Holdings Company pays an annual dividend of $5.08 per share and has a dividend yield of 0.8%. New Media Investment Group pays an annual dividend of $1.40 per share and has a dividend yield of 10.5%. Graham Holdings Company pays out 18.8% of its earnings in the form of a dividend. New Media Investment Group pays out 274.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New Media Investment Group has raised its dividend for 2 consecutive years. New Media Investment Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

About Graham Holdings Company

Graham Holdings Company, formerly The Washington Post Company, is a diversified education and media company whose principal operations include educational services, television broadcasting, cable television systems, and online, print and local TV news. The Company owns Kaplan, a provider of educational services to individuals, schools and businesses, serving over one million students annually with operations in more than 30 countries. Its programs include higher education, test preparation, language instruction and professional training. Its Post-Newsweek Stations, Inc owns six television stations which include WDIV-Detroit (NBC), KPRC-Houston (NBC),WPLG-Miami (ABC), WKMG-Orlando (CBS), KSAT-San Antonio (ABC) and WJXT-Jacksonville (independent). The stations also broadcast digital channels focusing on classic television and lifestyle programming, in addition to operating mobile sites and mobile applications delivering breaking news, weather and community news.

About New Media Investment Group

New Media Investment Group Inc. is a holding company. The Company owns, operates and invests in local media assets. The Company’s segments include Eastern US Publishing, Central US Publishing, Western US Publishing and BridgeTower. It focuses on owning and acquiring local media assets in small to mid-size markets. It is a publisher of local newspapers and related publications. As of December 25, 2016, its portfolio of media assets spanned across 538 markets and 36 states. As of December 25, 2016, its products included 631 community print publications, 538 Websites and two yellow page directories. Its directory portfolio includes Surewest Directories located in and around the Sacramento, California area, primarily in Roseville, California. The Roseville directory serves the local Roseville community. It also owns additional directory based in Mt. Shasta, California. Propel is its business services product line with digital products designed for small and midsized businesses (SMBs).

Receive News & Ratings for Graham Holdings Company Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Graham Holdings Company and related companies with MarketBeat.com's FREE daily email newsletter.