Salem Media Group (NASDAQ: SALM) and Beasley Broadcast Group (NASDAQ:BBGI) are both small-cap cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Dividends

Salem Media Group pays an annual dividend of $0.26 per share and has a dividend yield of 5.7%. Beasley Broadcast Group pays an annual dividend of $0.18 per share and has a dividend yield of 1.5%. Salem Media Group pays out 130.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Beasley Broadcast Group pays out 8.2% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Salem Media Group and Beasley Broadcast Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Salem Media Group $274.32 million 0.44 $8.87 million $0.20 23.00
Beasley Broadcast Group $136.66 million 2.45 $47.48 million $2.20 5.30

Beasley Broadcast Group has lower revenue, but higher earnings than Salem Media Group. Beasley Broadcast Group is trading at a lower price-to-earnings ratio than Salem Media Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

30.3% of Salem Media Group shares are owned by institutional investors. Comparatively, 14.7% of Beasley Broadcast Group shares are owned by institutional investors. 60.0% of Salem Media Group shares are owned by insiders. Comparatively, 61.6% of Beasley Broadcast Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Salem Media Group and Beasley Broadcast Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Salem Media Group 0 0 1 0 3.00
Beasley Broadcast Group 0 0 0 0 N/A

Profitability

This table compares Salem Media Group and Beasley Broadcast Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Salem Media Group 1.97% 5.02% 1.85%
Beasley Broadcast Group 25.94% 12.35% 4.05%

Volatility & Risk

Salem Media Group has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Beasley Broadcast Group has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Summary

Beasley Broadcast Group beats Salem Media Group on 8 of the 14 factors compared between the two stocks.

Salem Media Group Company Profile

Salem Media Group, Inc., formerly Salem Communications Corporation, is a multi-media company specializing in Christian and Conservative content, with media properties consisting of radio broadcasting, digital media, and book, magazine and newsletter publishing. The Company operates through three segments: Broadcast, Digital Media and Publishing. The Company’s broadcasting segment is engaged in the ownership and operation of radio stations in metropolitan markets. The Company’s radio stations carry national and local programming content, as well as national and local advertisers. The Company’s Digital Media segment focuses on Web-based platform designed for audiences interested in Christian and family-themed content and conservative news. The Company’s publishing segment consists of Regnery Publishing, Xulon Press and Salem Publishing. The Company owns and operates approximately 116 radio stations in over 40 markets.

Beasley Broadcast Group Company Profile

Beasley Broadcast Group, Inc. is a radio broadcasting company. The Company’s primary business is operating radio stations throughout the United States. As of December 31, 2016, the Company owned and operated 63 radio stations in various radio markets, Atlanta and Augusta in Georgia; Boston, Massachusetts; Charlotte, North Carolina; Detroit, Michigan; Fayetteville, North Carolina; Fort Myers-Naples, Florida; Las Vegas, Nevada; Middlesex, New Jersey; Monmouth, New Jersey; Morristown, New Jersey; Philadelphia, Pennsylvania; Tampa-Saint Petersburg, Florida; West Palm Beach-Boca Raton, Florida, and Wilmington, Delaware. The Company operates its radio stations in clusters to capture a range of demographic listener groups.

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