Twenty-First Century Fox (NASDAQ: FOX) and Viacom (NASDAQ:VIA) are both large-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Volatility & Risk

Twenty-First Century Fox has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Viacom has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Twenty-First Century Fox 10.30% 21.42% 7.01%
Viacom 14.13% 28.95% 6.46%

Valuation and Earnings

This table compares Twenty-First Century Fox and Viacom’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Twenty-First Century Fox $28.50 billion 2.14 $2.95 billion $1.61 20.48
Viacom $13.26 billion 1.03 $1.87 billion $4.67 7.28

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

Dividends

Twenty-First Century Fox pays an annual dividend of $0.36 per share and has a dividend yield of 1.1%. Viacom pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. Twenty-First Century Fox pays out 22.4% of its earnings in the form of a dividend. Viacom pays out 17.1% 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. Viacom is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Twenty-First Century Fox and Viacom, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Twenty-First Century Fox 0 1 2 0 2.67
Viacom 2 2 2 0 2.00

Twenty-First Century Fox currently has a consensus target price of $34.00, indicating a potential upside of 3.12%. Viacom has a consensus target price of $38.00, indicating a potential upside of 11.76%. Given Viacom’s higher possible upside, analysts plainly believe Viacom is more favorable than Twenty-First Century Fox.

Institutional and Insider Ownership

23.4% of Twenty-First Century Fox shares are owned by institutional investors. Comparatively, 2.4% of Viacom shares are owned by institutional investors. 39.4% of Twenty-First Century Fox shares are owned by company insiders. Comparatively, 0.7% of Viacom shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Twenty-First Century Fox beats Viacom on 8 of the 15 factors compared between the two stocks.

Twenty-First Century Fox Company Profile

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.

Viacom Company Profile

Viacom Inc. offers global media brands that create television programs, motion pictures, short-form content, applications, games, consumer products, social media experiences and other entertainment content. As of September 30, 2016, the Company offered its services for audiences in more than 180 countries. The Company operates through two segments: Media Networks and Filmed Entertainment. The Media Networks segment creates, acquires and distributes programming and other content for audiences The Media Networks segment provides entertainment content and related branded products for advertisers, content distributors and retailers. The Filmed Entertainment segment produces, finances, acquires and distributes motion pictures, television programming and other entertainment content under the Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Animation, Insurge Pictures, Nickelodeon Movies, MTV Films and Paramount Television brands.

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