News (NASDAQ: NWSA) and Daily Journal (NASDAQ:DJCO) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Insider & Institutional Ownership

60.9% of News shares are owned by institutional investors. Comparatively, 37.7% of Daily Journal shares are owned by institutional investors. 13.9% of News shares are owned by company insiders. Comparatively, 20.4% of Daily Journal shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares News and Daily Journal’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
News $8.14 billion 1.18 -$738.00 million ($1.13) -14.59
Daily Journal $41.38 million 7.77 -$910,000.00 ($0.66) -353.03

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

Profitability

This table compares News and Daily Journal’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%
Daily Journal -2.22% -0.63% -0.36%

Analyst Recommendations

This is a breakdown of current ratings and target prices for News and Daily Journal, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
News 0 2 2 0 2.50
Daily Journal 0 0 0 0 N/A

News currently has a consensus target price of $15.50, indicating a potential downside of 6.00%. Given News’ higher probable upside, equities research analysts plainly believe News is more favorable than Daily Journal.

Dividends

News pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Daily Journal does not pay a dividend. News pays out -17.7% of its earnings in the form of a dividend.

Risk & Volatility

News has a beta of 2.06, meaning that its stock price is 106% more volatile than the S&P 500. Comparatively, Daily Journal has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500.

Summary

News beats Daily Journal 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.

Daily Journal Company Profile

Daily Journal Corporation publishes newspapers and Websites covering California and Arizona, and produces various specialized information services. The Company also serves as a newspaper representative specializing in public notice advertising. It operates through two segments: Traditional Business and Journal Technologies. The Traditional Business segment provides newspaper publishing and related services. The Journal Technologies segment supplies case management software systems and related products to courts, prosecutor and public defender offices, probation departments and other justice agencies, including administrative law organizations, city and county governments and bar associations. These organizations use the Journal Technologies family of products to help manage cases and information electronically, to interface with other justice partners and to extend electronic services to bar members and the public. Its subsidiary is Journal Technologies, Inc. (Journal Technologies).

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