Grupo Televisa (NYSE: TV) and News Corporation (NASDAQ:NWSA) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitabiliy, valuation and analyst recommendations.

Volatility and Risk

Grupo Televisa has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, News Corporation has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500.

Profitability

This table compares Grupo Televisa and News Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Grupo Televisa 4.69% 4.62% 1.50%
News Corporation -2.64% 1.77% 1.36%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Grupo Televisa and News Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Grupo Televisa 0 3 2 0 2.40
News Corporation 1 2 2 0 2.20

Grupo Televisa currently has a consensus price target of $26.00, indicating a potential downside of 1.48%. News Corporation has a consensus price target of $15.20, indicating a potential upside of 8.73%. Given News Corporation’s higher probable upside, analysts clearly believe News Corporation is more favorable than Grupo Televisa.

Valuation & Earnings

This table compares Grupo Televisa and News Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Grupo Televisa $5.48 billion 11.94 $2.04 billion $0.39 67.67
News Corporation $8.29 billion 0.98 $736.00 million ($0.39) -35.85

Grupo Televisa has higher revenue, but lower earnings than News Corporation. News Corporation is trading at a lower price-to-earnings ratio than Grupo Televisa, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

61.4% of Grupo Televisa shares are held by institutional investors. Comparatively, 92.7% of News Corporation shares are held by institutional investors. 13.9% of News Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Grupo Televisa pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. News Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. Grupo Televisa pays out 20.5% of its earnings in the form of a dividend. News Corporation pays out -51.3% 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. News Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Grupo Televisa beats News Corporation on 8 of the 15 factors compared between the two stocks.

Grupo Televisa Company Profile

Grupo Televisa, S.A.B. is a media company in the international entertainment business. The Company operates in four business segments: Content, Sky, Telecommunications, and Other Businesses. It operates four broadcast channels in Mexico City and has affiliated stations throughout the country. It produces pay-television channels with national and international feeds, throughout Latin America, the United States, Canada, Europe and Asia Pacific. It exports its programs and formats to television networks around the world. It is also a Spanish-language magazine publisher. Its pay-television channels include three music, six movie, seven variety and entertainment channels and two sports channels. Its programs include telenovelas, newscasts, situation comedies, game shows, reality shows, children’s programs, comedy and variety programs, musical and cultural events, movies and educational programming. Its programming also includes broadcasts of special events and sports events in Mexico.

News Corporation Company Profile

News Corporation is a diversified media and information services company. The Company operates in five segments: News and Information Services, Cable Network Programming, Digital Real Estate Services, Book Publishing, and Other. The Company’s business consists of range of media, including news and information services, sports programming in Australia, digital real estate services, book publishing, and pay-television (TV) distribution in Australia, that are distributed under the brands, including The Wall Street Journal, Dow Jones, Herald Sun, The Sun, The Times, HarperCollins Publishers, FOX SPORTS Australia and realestate.com.au. The Company is a developing provider of digital education content, assessment and delivery services. The Company’s business component includes News and Information Services, Cable Network Programming, Digital Real Estate Services, Book Publishing, Amplify and Foxtel. In July 2014, it completed the acquisition of Harlequin Enterprises from Torstar Corp.

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