MSG Networks (NYSE: MSGN) and Time Warner (NYSE:TWX) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares MSG Networks and Time Warner’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MSG Networks 24.78% -16.20% 19.77%
Time Warner 14.10% 19.14% 7.27%

Insider and Institutional Ownership

78.4% of MSG Networks shares are held by institutional investors. Comparatively, 78.8% of Time Warner shares are held by institutional investors. 18.1% of MSG Networks shares are held by company insiders. Comparatively, 0.2% of Time Warner shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for MSG Networks and Time Warner, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MSG Networks 0 5 4 0 2.44
Time Warner 0 23 7 0 2.23

MSG Networks presently has a consensus target price of $24.13, indicating a potential upside of 19.14%. Time Warner has a consensus target price of $102.32, indicating a potential upside of 0.70%. Given MSG Networks’ stronger consensus rating and higher possible upside, analysts clearly believe MSG Networks is more favorable than Time Warner.

Volatility and Risk

MSG Networks has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, Time Warner has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Dividends

Time Warner pays an annual dividend of $1.61 per share and has a dividend yield of 1.6%. MSG Networks does not pay a dividend. Time Warner pays out 30.0% of its earnings in the form of a dividend. Time Warner has raised its dividend for 8 consecutive years.

Earnings & Valuation

This table compares MSG Networks and Time Warner’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MSG Networks $673.00 million 1.85 $323.63 million $2.20 9.20
Time Warner $30.12 billion 2.62 $8.69 billion $5.37 18.92

Time Warner has higher revenue and earnings than MSG Networks. MSG Networks is trading at a lower price-to-earnings ratio than Time Warner, indicating that it is currently the more affordable of the two stocks.

Summary

Time Warner beats MSG Networks on 11 of the 17 factors compared between the two stocks.

About MSG Networks

MSG Networks Inc., formerly The Madison Square Garden Company, is engaged in sports production, and content development and distribution. The Company owns and operates two regional sports and entertainment networks, MSG Network (MSGN) and MSG+, collectively MSG Networks. Its networks are distributed throughout its territory, which includes all of New York State and significant portions of New Jersey and Connecticut, as well as parts of Pennsylvania. The Company delivers live games of the New York Knicks (the Knicks) of the National Basketball Association (NBA); the New York Rangers (the Rangers), New York Islanders (the Islanders), New Jersey Devils (the Devils) and Buffalo Sabres (the Sabres) of the National Hockey League (NHL); the New York Liberty (the Liberty) of the Women’s National Basketball Association; the New York Red Bulls (the Red Bulls) of Major League Soccer (MLS), and the Westchester Knicks of the National Basketball Association Developmental League.

About Time Warner

Time Warner Inc. is a media and entertainment company. The Company operates through three segments: Turner, which consists of cable networks and digital media properties; Home Box Office, which consists of premium pay television and over the top (OTT) services and premium pay, basic tier television and OTT services internationally, and Warner Bros., which consists of television, feature film, home video, and videogame production and distribution. It also holds interests in companies that operate broadcast networks. The Company holds interest in Central European Media Enterprises Ltd. (CME), which is a broadcasting company that operates television networks in Bulgaria, Croatia, the Czech Republic, Romania, the Slovak Republic and Slovenia and The CW broadcast network (The CW), which includes a lineup of advertising-supported original programming, such as The 100, Arrow, Crazy Ex-Girlfriend, DC’s Legends of Tomorrow, The Flash, Frequency, iZombie, Jane the Virgin and No Tomorrow.

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