AMC Networks (NASDAQ: AMCX) and Discovery Communications (NASDAQ:DISCK) are both mid-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitabiliy and analyst recommendations.

Profitability

This table compares AMC Networks and Discovery Communications’ 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%
Discovery Communications 17.50% 23.67% 7.89%

Analyst Recommendations

This is a summary of recent ratings and target prices for AMC Networks and Discovery Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMC Networks 1 7 7 0 2.40
Discovery Communications 0 0 0 0 N/A

AMC Networks presently has a consensus target price of $60.18, suggesting a potential upside of 11.59%. Given AMC Networks’ higher possible upside, analysts clearly believe AMC Networks is more favorable than Discovery Communications.

Institutional & Insider Ownership

81.7% of AMC Networks shares are held by institutional investors. Comparatively, 47.9% of Discovery Communications shares are held by institutional investors. 17.7% of AMC Networks shares are held by insiders. Comparatively, 5.0% of Discovery Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares AMC Networks and Discovery Communications’ revenue, earnings per share 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
Discovery Communications $6.55 billion 1.69 $2.47 billion $1.91 13.12

Discovery Communications has higher revenue and earnings than AMC Networks. AMC Networks 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

AMC Networks has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Discovery Communications has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.

Summary

AMC Networks beats Discovery Communications on 7 of the 13 factors compared between the two stocks.

About AMC Networks

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.

About Discovery Communications

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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