TEGNA (NYSE: TGNA) and Nexstar Broadcasting Group (NASDAQ:NXST) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitabiliy, valuation, risk, institutional ownership, earnings and analyst recommendations.

Risk and Volatility

TEGNA has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500. Comparatively, Nexstar Broadcasting Group has a beta of 2.3, indicating that its stock price is 130% more volatile than the S&P 500.

Earnings & Valuation

This table compares TEGNA and Nexstar Broadcasting Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TEGNA $3.34 billion 0.93 $1.16 billion $1.87 7.74
Nexstar Broadcasting Group $1.39 billion 2.06 $488.14 million $2.33 26.01

TEGNA has higher revenue and earnings than Nexstar Broadcasting Group. TEGNA 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.

Profitability

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

Net Margins Return on Equity Return on Assets
TEGNA 12.25% 19.16% 5.64%
Nexstar Broadcasting Group 5.47% 24.33% 3.04%

Institutional and Insider Ownership

86.5% of TEGNA shares are held by institutional investors. 0.8% of TEGNA shares are held by company insiders. Comparatively, 8.4% of Nexstar Broadcasting Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

TEGNA pays an annual dividend of $0.28 per share and has a dividend yield of 1.9%. Nexstar Broadcasting Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.0%. TEGNA pays out 15.0% of its earnings in the form of a dividend. Nexstar Broadcasting Group pays out 51.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a breakdown of recent ratings for TEGNA and Nexstar Broadcasting Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TEGNA 1 3 5 0 2.44
Nexstar Broadcasting Group 0 0 7 0 3.00

TEGNA currently has a consensus target price of $23.31, indicating a potential upside of 61.11%. Nexstar Broadcasting Group has a consensus target price of $76.14, indicating a potential upside of 25.65%. Given TEGNA’s higher probable upside, equities analysts plainly believe TEGNA is more favorable than Nexstar Broadcasting Group.

Summary

Nexstar Broadcasting Group beats TEGNA on 9 of the 16 factors compared between the two stocks.

About TEGNA

Tegna Inc. has a portfolio of media and digital businesses that provide content. The Company’s segments include TEGNA Media (Media) and TEGNA Digital (Digital). As of December 31, 2016, its media business included 46 television stations operating in 38 markets and offered television programming and digital content. Its Media segment includes core advertising, including local and national non-political advertising; political advertising during elections; retransmission that represents satellite and cable networks, and telecommunications companies to carry its television signals; digital that includes digital marketing services and advertising on the stations’ Websites, tablet and mobile products, and other services. Its Digital business segment consists of three business units, including CareerBuilder, G/O Digital and Cofactor. Its CareerBuilder business units operate in the automotive and human capital solutions industries.

About Nexstar Broadcasting Group

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.

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