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

Analyst Ratings

This is a breakdown of current recommendations and price targets for News Corporation and Grupo Televisa, as reported by MarketBeat.

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

News Corporation presently has a consensus target price of $15.20, indicating a potential upside of 6.00%. Grupo Televisa has a consensus target price of $26.00, indicating a potential downside of 1.14%. Given News Corporation’s higher possible upside, equities research analysts plainly believe News Corporation is more favorable than Grupo Televisa.

Dividends

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

Insider and Institutional Ownership

93.9% of News Corporation shares are held by institutional investors. Comparatively, 61.0% of Grupo Televisa shares are held by institutional investors. 13.9% of News Corporation shares are held 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.

Earnings and Valuation

This table compares News Corporation and Grupo Televisa’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
News Corporation $8.29 billion 1.01 $736.00 million ($0.39) -36.77
Grupo Televisa $5.51 billion 11.83 $2.05 billion $0.39 67.44

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.

Volatility & Risk

News Corporation has a beta of 1.99, suggesting that its share price is 99% more volatile than the S&P 500. Comparatively, Grupo Televisa has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.

Profitability

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

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

About News Corporation

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.

About Grupo Televisa

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.

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