Head to Head Analysis: News (NWSA) vs. A.H. Belo (AHC)

News (NASDAQ: NWSA) and A.H. Belo (NYSE:AHC) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Insider & Institutional Ownership

61.0% of News shares are held by institutional investors. Comparatively, 57.2% of A.H. Belo shares are held by institutional investors. 13.9% of News shares are held by company insiders. Comparatively, 12.6% of A.H. Belo shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for News and A.H. Belo, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
News 0 2 2 0 2.50
A.H. Belo 0 0 0 0 N/A

News presently has a consensus price target of $15.50, suggesting a potential downside of 4.32%. Given News’ higher probable upside, research analysts clearly believe News is more favorable than A.H. Belo.

Profitability

This table compares News and A.H. Belo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
News -7.96% 2.27% 1.74%
A.H. Belo -8.59% 1.70% 0.80%

Valuation & Earnings

This table compares News and A.H. Belo’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
News $8.14 billion 1.16 -$738.00 million ($1.13) -14.34
A.H. Belo $259.98 million 0.41 -$19.31 million ($1.00) -4.95

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

Dividends

News pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. A.H. Belo pays an annual dividend of $0.32 per share and has a dividend yield of 6.5%. News pays out -17.7% of its earnings in the form of a dividend. A.H. Belo pays out -32.0% 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. A.H. Belo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

News has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500. Comparatively, A.H. Belo has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Summary

News beats A.H. Belo on 10 of the 15 factors compared between the two stocks.

News 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.

A.H. Belo Company Profile

A. H. Belo Corporation is a local news and information publishing company. The Company is engaged in providing commercial printing, distribution and direct mail services, as well as media and digital marketing services. The Company operates through two segments: Publishing and Marketing, Event Marketing and Other Services (MEMO). The Company’s Publishing segment includes its print operations associated with its newspapers, publications and related Websites. The Company’s publishing segment includes the operations of The Dallas Morning News (www.dallasnews.com), a Texas newspaper, and the Denton Record-Chronicle (www.dentonrc.com), a daily newspaper operating in Denton, Texas. The Company’s MEMO segment consists of marketing, event marketing and other businesses. It offers digital marketing solutions through Your Speakeasy, LLC (Speakeasy) and DMV Digital Holdings Company, Inc., and provides event promotion and marketing services through DMN CrowdSource LLC (CrowdSource).

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