Financial Contrast: Saga Communications (NASDAQ:SGA) & Gray Media (NYSE:GTN)

Saga Communications (NASDAQ:SGA) and Gray Media (NYSE:GTN) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Profitability

This table compares Saga Communications and Gray Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saga Communications	1.91%	1.27%	0.95%
Gray Media	5.64%	10.31%	2.17%

Dividends

Saga Communications pays an annual dividend of $1.00 per share and has a dividend yield of 8.4%. Gray Media pays an annual dividend of $0.32 per share and has a dividend yield of 6.8%. Saga Communications pays out 2,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gray Media pays out 78.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Saga Communications and Gray Media”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saga Communications	$112.00 million	0.68	$3.46 million	$0.05	237.60
Gray Media	$3.35 billion	0.14	$375.00 million	$0.41	11.50

Gray Media has higher revenue and earnings than Saga Communications. Gray Media is trading at a lower price-to-earnings ratio than Saga Communications, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Saga Communications and Gray Media, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saga Communications	2	0	0	0	1.00
Gray Media	1	1	3	0	2.40

Gray Media has a consensus price target of $7.25, indicating a potential upside of 53.76%. Given Gray Media’s stronger consensus rating and higher probable upside, analysts clearly believe Gray Media is more favorable than Saga Communications.

Risk & Volatility

Saga Communications has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500. Comparatively, Gray Media has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Insider and Institutional Ownership

74.3% of Saga Communications shares are owned by institutional investors. Comparatively, 78.6% of Gray Media shares are owned by institutional investors. 22.4% of Saga Communications shares are owned by insiders. Comparatively, 15.2% of Gray Media shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Gray Media beats Saga Communications on 12 of the 16 factors compared between the two stocks.

About Saga Communications

Saga Communications, Inc., a media company, engages in acquiring, developing, and operating broadcast properties in the United States. The company's radio stations employ various programming formats, including classic hits, country, classic country, hot/soft/urban adult contemporary, oldies, classic rock, rock, and news/talk. It owns and operates FM and AM radio stations, and metro signals serving various markets. Saga Communications, Inc. was incorporated in 1986 and is headquartered in Grosse Pointe Farms, Michigan.

About Gray Media

Gray Television, Inc., a television broadcasting company, owns and/or operates television stations and digital assets in the United States. It also broadcasts secondary digital channels affiliated to ABC, CBS, NBC, and FOX, as well as various other networks and program services, including CW Plus Network, MY Network, the MeTV Network, Circle, Telemundo, THE365, and Outlaw; and local news/weather channels in various markets. It owns and operates television stations and digital assets that serve television markets in the United States. The company was formerly known as Gray Communications Systems, Inc. and changed its name to Gray Television, Inc. in August 2002. Gray Television, Inc. was founded in 1891 and is headquartered in Atlanta, Georgia.