World Wrestling Entertainment (NYSE: WWE) and Twenty-First Century Fox (NASDAQ:FOXA) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Risk & Volatility

World Wrestling Entertainment has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Twenty-First Century Fox has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.

Dividends

World Wrestling Entertainment pays an annual dividend of $0.48 per share and has a dividend yield of 1.8%. Twenty-First Century Fox pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. World Wrestling Entertainment pays out 154.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Twenty-First Century Fox pays out 22.6% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares World Wrestling Entertainment and Twenty-First Century Fox’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
World Wrestling Entertainment $762.15 million 2.64 $81.40 million $0.31 84.16
Twenty-First Century Fox $28.50 billion 1.72 $7.11 billion $1.59 16.61

Twenty-First Century Fox has higher revenue and earnings than World Wrestling Entertainment. Twenty-First Century Fox is trading at a lower price-to-earnings ratio than World Wrestling Entertainment, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

49.5% of World Wrestling Entertainment shares are owned by institutional investors. Comparatively, 53.3% of Twenty-First Century Fox shares are owned by institutional investors. 49.8% of World Wrestling Entertainment shares are owned by insiders. Comparatively, 20.3% of Twenty-First Century Fox shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares World Wrestling Entertainment and Twenty-First Century Fox’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
World Wrestling Entertainment 3.29% 13.07% 5.51%
Twenty-First Century Fox 10.36% 22.46% 7.19%

Analyst Recommendations

This is a breakdown of recent ratings for World Wrestling Entertainment and Twenty-First Century Fox, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
World Wrestling Entertainment 1 3 6 0 2.50
Twenty-First Century Fox 0 5 16 0 2.76

World Wrestling Entertainment currently has a consensus target price of $24.43, indicating a potential downside of 6.37%. Twenty-First Century Fox has a consensus target price of $33.42, indicating a potential upside of 26.55%. Given Twenty-First Century Fox’s stronger consensus rating and higher possible upside, analysts clearly believe Twenty-First Century Fox is more favorable than World Wrestling Entertainment.

Summary

Twenty-First Century Fox beats World Wrestling Entertainment on 12 of the 16 factors compared between the two stocks.

About World Wrestling Entertainment

World Wrestling Entertainment, Inc. (WWE) is an integrated media and entertainment company. The Company’s segments are Network, Television, Home Entertainment, Digital Media, Live Events, Licensing, Venue Merchandise, WWEShop, WWE Studios, and Corporate and Other. The Company is engaged in the production and distribution of content through various channels, including its WWE Network, television rights agreements, pay-per-view event programming, live events, feature films, licensing of various WWE themed products, and the sale of consumer products featuring its brands. Its Network, Television, Home Entertainment and Digital Media are individual segments that comprise the Media Division. Its Live Events, Licensing, Venue Merchandise and WWEShop are individual segments that comprise the Consumer Products Division. Its Network segment consists of subscriptions to WWE Network. The Company’s Television segment consists of television rights fees and advertising.

About Twenty-First Century Fox

Twenty-First Century Fox, Inc. is a media and entertainment company. The Company’s segments include Cable Network Programming; Television; Filmed Entertainment, and Other, Corporate and Eliminations. The Cable Network Programming segment produces and licenses news, business news, sports, general entertainment, factual entertainment and movie programming for distribution. The Television segment is engaged in the operation of broadcast television stations and the broadcasting of network programming in the United States. The Filmed Entertainment segment is engaged in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media, and the production and licensing of television programming around the world. The Other, Corporate and Eliminations segment consists primarily of corporate overhead and eliminations, and other businesses.

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