Gannett Co. (NYSE: GCI) and Time (NYSE:TIME) are both small-cap consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitabiliy, institutional ownership and valuation.

Valuation and Earnings

This table compares Gannett Co. and Time’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gannett Co. $3.16 billion 0.32 $317.33 million ($0.02) -450.00
Time $3.03 billion 0.45 $383.00 million ($0.68) -20.29

Time has higher revenue, but lower earnings than Gannett Co.. Gannett Co. is trading at a lower price-to-earnings ratio than Time, indicating that it is currently the more affordable of the two stocks.

Dividends

Gannett Co. pays an annual dividend of $0.64 per share and has a dividend yield of 7.1%. Time pays an annual dividend of $0.16 per share and has a dividend yield of 1.2%. Gannett Co. pays out -3,200.0% of its earnings in the form of a dividend. Time pays out -23.5% 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. Gannett Co. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Gannett Co. has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Time has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Insider & Institutional Ownership

84.1% of Gannett Co. shares are held by institutional investors. Comparatively, 91.7% of Time shares are held by institutional investors. 0.7% of Gannett Co. shares are held by insiders. Comparatively, 1.9% of Time shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Gannett Co. and Time’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gannett Co. -0.07% 11.30% 3.70%
Time -2.18% 7.30% 2.54%

Analyst Ratings

This is a breakdown of recent recommendations for Gannett Co. and Time, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gannett Co. 0 1 1 0 2.50
Time 0 3 1 0 2.25

Gannett Co. currently has a consensus target price of $16.00, indicating a potential upside of 77.78%. Time has a consensus target price of $15.25, indicating a potential upside of 10.51%. Given Gannett Co.’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Gannett Co. is more favorable than Time.

Summary

Gannett Co. beats Time on 9 of the 15 factors compared between the two stocks.

Gannett Co. Company Profile

Gannett Co., Inc. is a media company. The Company operates as a newspaper publisher in the United States. As of December 25, 2016, it owned ReachLocal, Inc. (ReachLocal), a digital marketing solutions company; the USA TODAY NETWORK (made up of USA TODAY including digital sites and affiliates (USAT) and 109 local media organizations in 34 states in the United States and Guam), and Newsquest Media Group Ltd. (Newsquest), the Company’s subsidiary operating in the United Kingdom. The Company’s segments include Publishing, ReachLocal, and a Corporate and Other category. The publishing segment comprises the USA TODAY NETWORK and Newsquest. Its publishing operations also include commercial printing and distribution, marketing and data services. It also reaches small and medium sized businesses with digital marketing solutions principally through ReachLocal. ReachLocal is focused on local businesses and on providing a total digital marketing solution.

Time Company Profile

Time Inc. is a media and content company. The Company offers a portfolio of news and lifestyle brands across a range of interest areas. As of December 31, 2016, the Company’s brands included People, Time, Fortune, Sports Illustrated, InStyle, Real Simple, Southern Living, Entertainment Weekly, Food & Wine, Travel + Leisure and Essence, as well as approximately 50 titles in the United Kingdom. The Company also offers its brands through other media and platforms including licensing, video and television, live events and paid products and services. The Company also offers events, such as the Time 100, Fortune Most Powerful Women, People’s Sexiest Man Alive, Sports Illustrated’s Sportsperson of the Year, the Essence Festival and the Food & Wine Classic in Aspen. It is a subscription marketer in the United States media industry. It also offers its advertisers a range of analytics and research services, including consumer insights, audience measurement and accountability reporting.

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