Salem Media Group (NASDAQ: SALM) and Pandora Media (NYSE:P) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitabiliy, institutional ownership, earnings and valuation.

Volatility & Risk

Salem Media Group has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Pandora Media has a beta of 0.07, indicating that its stock price is 93% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Salem Media Group and Pandora Media, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Salem Media Group 0 0 0 0 N/A
Pandora Media 1 20 16 0 2.41

Pandora Media has a consensus price target of $12.92, indicating a potential upside of 36.48%. Given Pandora Media’s higher possible upside, analysts plainly believe Pandora Media is more favorable than Salem Media Group.

Insider & Institutional Ownership

29.7% of Salem Media Group shares are owned by institutional investors. 60.0% of Salem Media Group shares are owned by insiders. Comparatively, 2.6% of Pandora Media shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Salem Media Group pays an annual dividend of $0.26 per share and has a dividend yield of 3.6%. Pandora Media does not pay a dividend. Salem Media Group pays out 72.2% of its earnings in the form of a dividend.

Profitability

This table compares Salem Media Group and Pandora Media’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Salem Media Group 3.49% 6.42% 2.32%
Pandora Media -25.66% -45.15% -21.73%

Valuation and Earnings

This table compares Salem Media Group and Pandora Media’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Salem Media Group $274.73 million 0.69 $46.50 million $0.36 20.14
Pandora Media $1.40 billion 1.63 -$256.51 million ($1.54) -6.15

Salem Media Group has higher revenue, but lower earnings than Pandora Media. Pandora Media is trading at a lower price-to-earnings ratio than Salem Media Group, indicating that it is currently the more affordable of the two stocks.

Summary

Salem Media Group beats Pandora Media on 9 of the 14 factors compared between the two stocks.

Salem Media Group Company Profile

Salem Media Group, Inc., formerly Salem Communications Corporation, is a multi-media company specializing in Christian and Conservative content, with media properties consisting of radio broadcasting, digital media, and book, magazine and newsletter publishing. The Company operates through three segments: Broadcast, Digital Media and Publishing. The Company’s broadcasting segment is engaged in the ownership and operation of radio stations in metropolitan markets. The Company’s radio stations carry national and local programming content, as well as national and local advertisers. The Company’s Digital Media segment focuses on Web-based platform designed for audiences interested in Christian and family-themed content and conservative news. The Company’s publishing segment consists of Regnery Publishing, Xulon Press and Salem Publishing. The Company owns and operates approximately 116 radio stations in over 40 markets.

Pandora Media Company Profile

Pandora Media, Inc. (Pandora) is a music discovery platform, offering a personalized experience for each of its listeners wherever and whenever they want to listen to music, whether through earbuds, car speakers or live on stage. The Company delivers targeted messages to its listeners using a combination of audio, display and video advertisements. Its segments include Pandora-Internet Radio Service and Ticketfly. As of December 31, 2016, it provided Pandora service through two models: advertising-supported service and subscription service-Pandora Plus. Pandora is integrated with connected devices, including automobiles, automotive aftermarket devices and consumer electronic devices. Its Ticketfly service is a cloud ticketing platform for live events. It operates ticketing service through its subsidiary, Ticketfly, a live events technology company that provides ticketing and marketing software and services for its clients, which are venues and event promoters, across North America.

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