Critical Review: Townsquare Media (TSQ) and Urban One (UONE)

Townsquare Media (NYSE:TSQ) and Urban One (NASDAQ:UONE) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Townsquare Media and Urban One, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Townsquare Media 0 1 2 0 2.67
Urban One 0 0 0 0 N/A

Townsquare Media currently has a consensus target price of $10.00, indicating a potential upside of 69.78%. Given Townsquare Media’s higher possible upside, research analysts plainly believe Townsquare Media is more favorable than Urban One.

Insider & Institutional Ownership

43.8% of Townsquare Media shares are held by institutional investors. Comparatively, 0.3% of Urban One shares are held by institutional investors. 26.7% of Townsquare Media shares are held by insiders. Comparatively, 78.3% of Urban One shares are held 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.

Risk and Volatility

Townsquare Media has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Urban One has a beta of -0.82, suggesting that its share price is 182% less volatile than the S&P 500.

Earnings & Valuation

This table compares Townsquare Media and Urban One’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Townsquare Media $507.43 million 0.22 -$10.27 million $0.74 7.96
Urban One $440.04 million 0.24 $111.88 million N/A N/A

Urban One has lower revenue, but higher earnings than Townsquare Media.

Dividends

Townsquare Media pays an annual dividend of $0.30 per share and has a dividend yield of 5.1%. Urban One does not pay a dividend. Townsquare Media pays out 40.5% of its earnings in the form of a dividend.

Profitability

This table compares Townsquare Media and Urban One’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Townsquare Media -9.68% 6.11% 2.16%
Urban One 33.45% 85.34% 2.67%

About Townsquare Media

Townsquare Media, Inc. operates as a radio, digital media, entertainment, and digital marketing solutions company in small and mid-sized markets. It operates through two segments, Local Marketing Solutions and Entertainment. The Local Marketing Solutions segment provides broadcast and digital solutions to advertisers and businesses through its radio stations, Websites, radio stations' online streams, and mobile applications. It also offers digital marketing solutions, such as traditional and mobile enabled Website development and hosting services, e-commerce platforms, search engine and online directory optimization services, online reputation management, and social media management services under the Townsquare Interactive brand; and e-commerce products to consumers and advertisers through its proprietary deal and auction platform. As of December 31, 2017, this segment owned and operated 317 radio stations and approximately 325 Websites in 67 markets in the United States. The Entertainment segment creates, promotes, and produces live events, including festivals, fairs, concerts, expositions, and other experiential events. This segment also offer event production services to third parties; and digital advertising services, as well as owns a proprietary ticketing platform. In addition, it owns and operates a portfolio of 9 music and entertainment based national Websites. The company was formerly known as Regent Communications, Inc. and changed its name to Townsquare Media, Inc. in May 2010. Townsquare Media, Inc. was founded in 1996 and is headquartered in Greenwich, Connecticut.

About Urban One

Urban One, Inc., together with its subsidiaries, operates as an urban-oriented multi-media company in the United States. The company operates through four segments: Radio Broadcasting, Reach Media, Digital, and Cable Television. The Radio Broadcasting segment includes radio broadcasting operations that primarily target African-American and urban listeners. As of December 31, 2017, it owned and/or operated 56 broadcast stations located in 15 urban markets. The Reach Media segment operates operate radio stations, including the Tom Joyner Morning Show; and other syndicated programming assets, including the Rickey Smiley Morning Show, the Russ Parr Morning Show, and the DL Hughley Show, as well as Get Up! Mornings with Erica Campbell. This segment also operates BlackAmericaWeb.com, an African-American targeted news and entertainment website; and operates other event related activities. The Digital segment is involved in online business, including the operation of Interactive One, an online platform serving the African-American community through social content, news, information, and entertainment Websites, including Cassius, Bossip, HipHopWired, and MadameNoire digital platforms and brands. The Cable Television segment operates TV One, an African-American targeted cable television network. The company was formerly known as Radio One, Inc. and changed its name to Urban One, Inc. in May 2017. Urban One, Inc. was founded in 1980 and is based in Silver Spring, Maryland.

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