Scripps Networks Interactive (NASDAQ: SNI) and Discovery Communications (NASDAQ:DISCB) are both large-cap consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitabiliy, institutional ownership, dividends and earnings.

Valuation and Earnings

This table compares Scripps Networks Interactive and Discovery Communications’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Scripps Networks Interactive $3.44 billion 2.97 $1.55 billion $4.47 17.62
Discovery Communications $6.55 billion 1.89 $2.47 billion $1.91 14.61

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

Dividends

Scripps Networks Interactive pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. Discovery Communications does not pay a dividend. Scripps Networks Interactive pays out 26.8% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and recommmendations for Scripps Networks Interactive and Discovery Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scripps Networks Interactive 2 7 4 0 2.15
Discovery Communications 0 0 0 0 N/A

Scripps Networks Interactive presently has a consensus price target of $76.92, suggesting a potential downside of 2.32%. Given Scripps Networks Interactive’s higher probable upside, equities research analysts clearly believe Scripps Networks Interactive is more favorable than Discovery Communications.

Risk and Volatility

Scripps Networks Interactive has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Discovery Communications has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500.

Profitability

This table compares Scripps Networks Interactive and Discovery Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scripps Networks Interactive 16.94% 30.71% 10.99%
Discovery Communications 17.50% 23.67% 7.89%

Institutional & Insider Ownership

69.1% of Scripps Networks Interactive shares are owned by institutional investors. 2.5% of Scripps Networks Interactive shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Scripps Networks Interactive beats Discovery Communications on 10 of the 15 factors compared between the two stocks.

Scripps Networks Interactive Company Profile

Scripps Networks Interactive, Inc. is a developer of lifestyle-oriented content, providing primarily home, food, travel and other lifestyle-related programing. The Company’s content is distributed through multiple methods, including television, the Internet, digital platforms and licensing arrangements. The Company’s segments include U.S. Networks, International Networks, and Corporate and Other. As of December 31, 2016, the Company’s U.S. Networks segment consisted of six national television networks: HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. The Company’s International Networks includes the TVN S.A. (TVN) portfolio of networks and other lifestyle-oriented networks available in the United Kingdom, other European markets, the Middle East and Africa (EMEA), Asia Pacific (APAC) and Latin America. In addition to the broadcast networks, it also licenses a portion of its programing to other broadcasters around the world.

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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