Starz Acquisition (NASDAQ: LCAPA) and Gray Television (NYSE:GTN) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Valuation & Earnings

This table compares Starz Acquisition and Gray Television’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Starz Acquisition N/A N/A N/A N/A N/A
Gray Television $872.25 million 1.18 $332.14 million $1.60 9.78

Gray Television has higher revenue and earnings than Starz Acquisition.

Insider and Institutional Ownership

81.3% of Gray Television shares are held by institutional investors. 12.0% of Gray Television shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Starz Acquisition and Gray Television’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Starz Acquisition -68.21% -14.75% -6.41%
Gray Television 13.38% 17.32% 3.12%

Analyst Recommendations

This is a breakdown of recent recommendations for Starz Acquisition and Gray Television, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Starz Acquisition 0 0 0 0 N/A
Gray Television 0 0 4 0 3.00

Gray Television has a consensus price target of $18.25, suggesting a potential upside of 16.61%. Given Gray Television’s higher possible upside, analysts plainly believe Gray Television is more favorable than Starz Acquisition.

Summary

Gray Television beats Starz Acquisition on 8 of the 8 factors compared between the two stocks.

Starz Acquisition Company Profile

Starz Acquisition LLC, formerly Starz, is an integrated media and entertainment company. The Company provides premium subscription video programming in the United States to cable operators, satellite television providers, telecommunications companies and online video providers. The Company’s segments include Starz Networks and Starz Distribution. The Starz Networks segment provides premium subscription video programming to the United States multichannel video programming distributors (MVPDs), including cable operators (such as Comcast and Time Warner Cable), satellite television providers (such as DIRECTV and DISH Network) and telecommunications companies (such as AT&T and Verizon). The Starz Distribution segment includes the operations of its Anchor Bay Entertainment, Starz Digital and Starz Worldwide Distribution businesses. It also develops, produces and acquires entertainment content and distributes this content to consumers in the United States and throughout the world.

Gray Television Company Profile

Gray Television, Inc. is a television broadcast company. The Company owns and operates television stations and digital assets in various markets across the United States. As of February 21, 2017, the Company owned and/or operated television stations in 54 television markets broadcasting over 200 separate programming streams, including 37 affiliates of the CBS Network (CBS), 29 affiliates of the NBC Network (NBC), 20 affiliates of the ABC Network (ABC) and 15 affiliates of the FOX Network (FOX). In addition to a primary broadcast channel, each of its stations can also broadcast additional secondary digital channels within a market by utilizing the same bandwidth, but with different programming from the primary channel. The Company also broadcasts local news/weather channels in certain of its existing markets. Along with affiliations with ABC, CBS and FOX, the Company’s secondary channels are affiliated with various smaller networks and program services.

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