Time (NYSE: TIME) and New Media Investment Group (NYSE:NEWM) are both small-cap consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Dividends

Time pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. New Media Investment Group pays an annual dividend of $1.40 per share and has a dividend yield of 10.4%. Time pays out -12.3% of its earnings in the form of a dividend. New Media Investment Group pays out -1,272.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Time has raised its dividend for 2 consecutive years. New Media Investment Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Time and New Media Investment Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Time $2.96 billion 0.42 $384.00 million ($1.30) -9.50
New Media Investment Group $1.27 billion 0.56 $144.35 million ($0.11) -122.73

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Time and New Media Investment Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Time 0 3 1 0 2.25
New Media Investment Group 1 1 1 0 2.00

Time currently has a consensus target price of $15.25, indicating a potential upside of 23.48%. New Media Investment Group has a consensus target price of $13.00, indicating a potential downside of 3.70%. Given Time’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Time is more favorable than New Media Investment Group.

Insider & Institutional Ownership

92.9% of Time shares are held by institutional investors. Comparatively, 76.4% of New Media Investment Group shares are held by institutional investors. 1.9% of Time shares are held by insiders. Comparatively, 5.3% of New Media Investment Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Time has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, New Media Investment Group has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Profitability

This table compares Time and New Media Investment Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Time -4.34% 7.06% 2.39%
New Media Investment Group -0.64% 2.22% 1.22%

About Time

Time Inc. is a media and content company. The Company offers a portfolio of news and lifestyle brands across a range of interest areas. As of December 31, 2016, the Company’s brands included People, Time, Fortune, Sports Illustrated, InStyle, Real Simple, Southern Living, Entertainment Weekly, Food & Wine, Travel + Leisure and Essence, as well as approximately 50 titles in the United Kingdom. The Company also offers its brands through other media and platforms including licensing, video and television, live events and paid products and services. The Company also offers events, such as the Time 100, Fortune Most Powerful Women, People’s Sexiest Man Alive, Sports Illustrated’s Sportsperson of the Year, the Essence Festival and the Food & Wine Classic in Aspen. It is a subscription marketer in the United States media industry. It also offers its advertisers a range of analytics and research services, including consumer insights, audience measurement and accountability reporting.

About New Media Investment Group

New Media Investment Group Inc. is a holding company. The Company owns, operates and invests in local media assets. The Company’s segments include Eastern US Publishing, Central US Publishing, Western US Publishing and BridgeTower. It focuses on owning and acquiring local media assets in small to mid-size markets. It is a publisher of local newspapers and related publications. As of December 25, 2016, its portfolio of media assets spanned across 538 markets and 36 states. As of December 25, 2016, its products included 631 community print publications, 538 Websites and two yellow page directories. Its directory portfolio includes Surewest Directories located in and around the Sacramento, California area, primarily in Roseville, California. The Roseville directory serves the local Roseville community. It also owns additional directory based in Mt. Shasta, California. Propel is its business services product line with digital products designed for small and midsized businesses (SMBs).

Receive News & Stock Ratings for Time Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Time Inc. and related stocks with our FREE daily email newsletter.