Scripps Networks Interactive (NASDAQ: SNI) and TEGNA (NYSE:TGNA) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Insider and Institutional Ownership

75.9% of Scripps Networks Interactive shares are owned by institutional investors. Comparatively, 98.0% of TEGNA shares are owned by institutional investors. 2.5% of Scripps Networks Interactive shares are owned by insiders. Comparatively, 0.8% of TEGNA shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Scripps Networks Interactive and TEGNA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scripps Networks Interactive 18.20% 29.93% 11.45%
TEGNA 11.90% 20.51% 5.56%

Volatility & Risk

Scripps Networks Interactive has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, TEGNA has a beta of 1.73, meaning that its stock price is 73% more volatile than the S&P 500.

Dividends

Scripps Networks Interactive pays an annual dividend of $1.20 per share and has a dividend yield of 1.4%. TEGNA pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. Scripps Networks Interactive pays out 24.8% of its earnings in the form of a dividend. TEGNA pays out 17.0% 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. TEGNA is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for Scripps Networks Interactive and TEGNA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scripps Networks Interactive 1 13 3 0 2.12
TEGNA 1 6 3 0 2.20

Scripps Networks Interactive presently has a consensus price target of $83.77, indicating a potential downside of 2.75%. TEGNA has a consensus price target of $18.63, indicating a potential upside of 39.93%. Given TEGNA’s stronger consensus rating and higher possible upside, analysts clearly believe TEGNA is more favorable than Scripps Networks Interactive.

Valuation & Earnings

This table compares Scripps Networks Interactive and TEGNA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Scripps Networks Interactive $3.47 billion 3.22 $1.54 billion $4.84 17.80
TEGNA $3.35 billion 0.85 $1.17 billion $1.65 8.07

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

Summary

Scripps Networks Interactive beats TEGNA on 9 of the 15 factors compared between the two stocks.

About Scripps Networks Interactive

Scripps Networks Interactive, Inc. is a developer of lifestyle-oriented content, providing primarily home, food, travel and other lifestyle-related programing. The Company’s content is distributed through multiple methods, including television, the Internet, digital platforms and licensing arrangements. The Company’s segments include U.S. Networks, International Networks, and Corporate and Other. As of December 31, 2016, the Company’s U.S. Networks segment consisted of six national television networks: HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. The Company’s International Networks includes the TVN S.A. (TVN) portfolio of networks and other lifestyle-oriented networks available in the United Kingdom, other European markets, the Middle East and Africa (EMEA), Asia Pacific (APAC) and Latin America. In addition to the broadcast networks, it also licenses a portion of its programing to other broadcasters around the world.

About TEGNA

Tegna Inc. has a portfolio of media and digital businesses that provide content. The Company’s segments include TEGNA Media (Media) and TEGNA Digital (Digital). As of December 31, 2016, its media business included 46 television stations operating in 38 markets and offered television programming and digital content. Its Media segment includes core advertising, including local and national non-political advertising; political advertising during elections; retransmission that represents satellite and cable networks, and telecommunications companies to carry its television signals; digital that includes digital marketing services and advertising on the stations’ Websites, tablet and mobile products, and other services. Its Digital business segment includes G/O Digital and Cofactor.

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