E.W. Scripps Company (The) (NYSE: SSP) and Discovery Communications (NASDAQ:DISCA) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitabiliy, institutional ownership, risk, analyst recommendations, earnings and valuation.

Profitability

This table compares E.W. Scripps Company (The) and Discovery Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
E.W. Scripps Company (The) 6.05% 5.90% 3.24%
Discovery Communications 16.88% 22.74% 7.59%

Valuation & Earnings

This table compares E.W. Scripps Company (The) and Discovery Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
E.W. Scripps Company (The) $944.55 million 1.59 $175.34 million $0.69 26.36
Discovery Communications $6.59 billion 2.04 $2.49 billion $1.89 12.49

Discovery Communications has higher revenue and earnings than E.W. Scripps Company (The). Discovery Communications is trading at a lower price-to-earnings ratio than E.W. Scripps Company (The), indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

74.0% of E.W. Scripps Company (The) shares are held by institutional investors. Comparatively, 44.3% of Discovery Communications shares are held by institutional investors. 4.2% of E.W. Scripps Company (The) shares are held by insiders. Comparatively, 5.8% of Discovery Communications shares are held 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.

Analyst Recommendations

This is a breakdown of current ratings for E.W. Scripps Company (The) and Discovery Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
E.W. Scripps Company (The) 0 2 2 0 2.50
Discovery Communications 3 10 3 0 2.00

E.W. Scripps Company (The) presently has a consensus target price of $23.00, indicating a potential upside of 26.44%. Discovery Communications has a consensus target price of $28.33, indicating a potential upside of 20.06%. Given E.W. Scripps Company (The)’s stronger consensus rating and higher possible upside, equities research analysts clearly believe E.W. Scripps Company (The) is more favorable than Discovery Communications.

Volatility & Risk

E.W. Scripps Company (The) has a beta of 2.01, indicating that its stock price is 101% more volatile than the S&P 500. Comparatively, Discovery Communications has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.

Summary

Discovery Communications beats E.W. Scripps Company (The) on 9 of the 14 factors compared between the two stocks.

E.W. Scripps Company (The) Company Profile

The E. W. Scripps Company is a media enterprise with interests in television and radio broadcasting, as well as local and national digital media brands. The Company’s segments include television, radio, digital, and syndication and other. As of December 31, 2016, the Television segment included approximately 15 American Broadcasting Company (ABC) affiliates, five National Broadcasting Company (NBC) affiliates, two FOX affiliates, two Columbia Broadcasting System (CBS) affiliates and four non big-four affiliated stations. As of December 31, 2016, the radio segment owned 34 radio stations in eight markets. As of December 31, 2016, it operated 28 frequency modulation (FM) stations and six Amplitude Modulation (AM) stations. The digital segment includes the digital operations of its local television and radio businesses. Its Syndication and other segment primarily includes the syndication of news features and comics and other features for the newspaper industry.

Discovery Communications Company Profile

Discovery Communications, Inc. (Discovery) is a global media company. The Company provides content across multiple distribution platforms, including pay-television (pay-TV), free-to-air (FTA) and broadcast television, Websites, digital distribution arrangements and content licensing agreements. Its segments include U.S. Networks, which consists principally of domestic television networks and digital content services; International Networks, consisting primarily of international television networks and digital content services, and Education and Other, which consists principally of curriculum-based product and service offerings, and production studios. The Company’s portfolio of networks includes television brands, such as Discovery Channel, Animal Planet, ID, Velocity (known as Turbo outside of the United States) and Eurosport. It is also engaged in extending content distribution across various platforms, including brand-aligned Websites, Web-native networks and online streaming.

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