Financial Analysis: CTC Media (CTCM) & Discovery Communications (DISCK)

CTC Media (NASDAQ: CTCM) and Discovery Communications (NASDAQ:DISCK) are both cyclical consumer goods & services companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Profitability

This table compares CTC Media and Discovery Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CTC Media N/A -65.84% -54.51%
Discovery Communications 16.63% 22.24% 6.83%

Institutional & Insider Ownership

48.4% of Discovery Communications shares are owned by institutional investors. 5.0% of Discovery Communications shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for CTC Media and Discovery Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CTC Media 0 0 0 0 N/A
Discovery Communications 0 2 0 0 2.00

Discovery Communications has a consensus price target of $22.00, indicating a potential upside of 19.57%. Given Discovery Communications’ higher probable upside, analysts plainly believe Discovery Communications is more favorable than CTC Media.

Risk and Volatility

CTC Media has a beta of 2.44, meaning that its stock price is 144% more volatile than the S&P 500. Comparatively, Discovery Communications has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500.

Valuation & Earnings

This table compares CTC Media and Discovery Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CTC Media N/A N/A N/A ($0.02) -102.50
Discovery Communications $6.50 billion 1.07 $1.19 billion $1.90 9.68

Discovery Communications has higher revenue and earnings than CTC Media. CTC Media is trading at a lower price-to-earnings ratio than Discovery Communications, indicating that it is currently the more affordable of the two stocks.

Summary

Discovery Communications beats CTC Media on 8 of the 9 factors compared between the two stocks.

CTC Media Company Profile

CTC Media, Inc., through its approximately 25% interest in CTC Investments LLC (CTC Investments), operates television channels in Russia and Kazakhstan. The Company’s segment is its investment in CTC Investments. The Company operates the CTC, Domashny, Che and CTC Love television channels in Russia and Channel 31 in Kazakhstan, as well as other media assets. CTC offers entertainment programming for the whole family and targets 10 to 45 year-old viewers. Domashny is a channel focused on 25 to 59 year-old female viewers. Domashny’s programming focuses on women’s lifestyle programming. Che is a channel that targets 25 to 49 year-old viewers, and focuses primarily on men’s interests, habits and insights. CTC Love is a channel that focuses on love and relationships. CTC Love is aimed at young girls and women, and its principal target audience is 11 to 34 year-old viewers. Channel 31 is a Kazakh channel that targets 6 to 54 year-old viewers.

Discovery Communications Company Profile

Discovery Communications, Inc. (Discovery) is a global media company. The Company provides content across multiple distribution platforms, including pay-television (pay-TV), free-to-air (FTA) and broadcast television, Websites, digital distribution arrangements and content licensing agreements. Its segments include U.S. Networks, which consists principally of domestic television networks and digital content services; International Networks, consisting primarily of international television networks and digital content services, and Education and Other, which consists principally of curriculum-based product and service offerings, and production studios. The Company’s portfolio of networks includes television brands, such as Discovery Channel, Animal Planet, ID, Velocity (known as Turbo outside of the United States) and Eurosport. It is also engaged in extending content distribution across various platforms, including brand-aligned Websites, Web-native networks and online streaming.

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