AMC Networks (NASDAQ: AMCX) and Nexstar Broadcasting Group (NASDAQ:NXST) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, earnings, risk, dividends, valuation and analyst recommendations.

Dividends

Nexstar Broadcasting Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.1%. AMC Networks does not pay a dividend. Nexstar Broadcasting Group pays out 51.5% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares AMC Networks and Nexstar Broadcasting Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AMC Networks $2.77 billion 1.30 $845.29 million $4.14 13.03
Nexstar Broadcasting Group $1.39 billion 1.97 $488.14 million $2.33 24.85

AMC Networks has higher revenue and earnings than Nexstar Broadcasting Group. AMC Networks is trading at a lower price-to-earnings ratio than Nexstar Broadcasting Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for AMC Networks and Nexstar Broadcasting Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMC Networks 1 7 7 0 2.40
Nexstar Broadcasting Group 0 0 7 0 3.00

AMC Networks currently has a consensus price target of $60.18, indicating a potential upside of 11.59%. Nexstar Broadcasting Group has a consensus price target of $76.14, indicating a potential upside of 31.51%. Given Nexstar Broadcasting Group’s stronger consensus rating and higher possible upside, analysts clearly believe Nexstar Broadcasting Group is more favorable than AMC Networks.

Profitability

This table compares AMC Networks and Nexstar Broadcasting Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMC Networks 10.59% 502.40% 8.63%
Nexstar Broadcasting Group 5.47% 24.33% 3.04%

Insider and Institutional Ownership

81.7% of AMC Networks shares are owned by institutional investors. 17.7% of AMC Networks shares are owned by company insiders. Comparatively, 7.8% of Nexstar Broadcasting Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

AMC Networks has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Nexstar Broadcasting Group has a beta of 2.24, indicating that its stock price is 124% more volatile than the S&P 500.

Summary

AMC Networks beats Nexstar Broadcasting Group on 9 of the 15 factors compared between the two stocks.

AMC Networks Company Profile

AMC Networks Inc. is a holding company, which conducts all of its operations through its subsidiaries. The Company owns and operates entertainment businesses and assets. It operates through two segments: National Networks, and International and Other. National Networks includes activities of its programming businesses, which include its programming networks distributed in the United States and Canada. The International and Other segment includes AMC Networks International (AMCNI), the Company’s international programming businesses consisting of a portfolio of channels in Europe, Latin America, the Middle East and parts of Asia and Africa; IFC Films, the Company’s independent film distribution business; AMCNI- DMC, the broadcast solutions unit of certain networks of AMCNI and third-party networks, and various developing online content distribution initiatives. National Networks’ programming networks include AMC, WE tv, BBC AMERICA and SundanceTV.

Nexstar Broadcasting Group Company Profile

Nexstar Media Group, Inc., formerly Nexstar Broadcasting Group, Inc., is a television broadcasting and digital media company. The Company is focused on the acquisition, development and operation of television stations and interactive community Websites, and digital media services in medium-sized markets in the United States. The Company’s segments include Broadcasting and Other. The Company’s broadcast segment includes television stations and related community-focused Websites that it owns, operates, programs or provides sales and other services to in various markets across the United States. The other activities of the Company include corporate functions, eliminations and other operations. As of December 31, 2016, it owned, operated, programmed or provided sales and other services to 104 full power television stations in 62 markets in the states of Alabama, Arizona, Arkansas, California, Colorado, Florida, New York, Utah, Vermont, Virginia, West Virginia and Wisconsin, among others.

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