Emmis Communications (NASDAQ:EMMS) and Salem Media Group (NASDAQ:SALM) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Emmis Communications and Salem Media Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Emmis Communications 0 0 0 0 N/A
Salem Media Group 0 0 2 0 3.00

Salem Media Group has a consensus price target of $3.50, indicating a potential upside of 20.69%. Given Salem Media Group’s higher probable upside, analysts clearly believe Salem Media Group is more favorable than Emmis Communications.

Dividends

Salem Media Group pays an annual dividend of $0.26 per share and has a dividend yield of 9.0%. Emmis Communications does not pay a dividend. Salem Media Group pays out 118.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Emmis Communications and Salem Media Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Emmis Communications $148.49 million 0.33 $82.12 million N/A N/A
Salem Media Group $263.74 million 0.29 $24.64 million $0.22 13.18

Emmis Communications has higher earnings, but lower revenue than Salem Media Group.

Risk and Volatility

Emmis Communications has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Salem Media Group has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Institutional and Insider Ownership

35.0% of Emmis Communications shares are held by institutional investors. Comparatively, 26.5% of Salem Media Group shares are held by institutional investors. 32.3% of Emmis Communications shares are held by insiders. Comparatively, 60.0% of Salem Media Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Emmis Communications and Salem Media Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Emmis Communications 30.32% 38.24% 14.51%
Salem Media Group 8.46% 2.42% 0.97%

About Emmis Communications

Emmis Communications Corporation, a diversified media company, engages in radio broadcasting activities in the United States. The company operates in three segments: Radio, Publishing, and Corporate & Emerging Technologies. It operates 11 FM and 3 AM radio stations in New York, Los Angeles, Indianapolis, and Austin, as well as publishes Indianapolis monthly magazine. The company also develops and licenses TagStation, a cloud-based software platform that allows a broadcaster to manage album art, meta data, and enhanced advertising on its various broadcasts; and develops NextRadio, a smartphone application that marries over-the-air FM radio broadcasts with visual and interactive features on smartphones. In addition, it provides Dial Report that offers radio advertising buyers and sellers big data analytics derived from radio station network, smartphone usage, location-based data, listening data, and demographic and behavioral attributes; and engages in dynamic pricing business. Emmis Communications Corporation was founded in 1981 and is based in Indianapolis, Indiana.

About Salem Media Group

Salem Media Group, Inc. operates as a multimedia company in the United States. It operates through three segments: Broadcast, Digital Media, and Publishing. The company owns and operates radio networks, which produce and distribute talk, news, and music programming to radio stations, as well as sells commercial airtime. It also provides Christian and conservative content, investing and health-themed content, e-commerce, audio and video streaming, and other resources digitally through Christian content Websites, including BibleStudyTools.com, Crosswalk.com, GodVine.com, iBelieve.com, GodTube.com, OnePlace.com, Christianity.com, GodUpdates.com, CrossCards.com, ChristianHeadlines.com, LightSource.com, AllCreated.com, ChristianRadio.com, CCMmagazine.com, SingingNews.com, and SouthernGospel.com; and conservative opinion Websites, such as Townhall.com, HotAir.com, Twitchy.com, RedState.com, BearingArms.com, HumanEvents.com, and ConservativeRadio.com. In addition, the company publishes digital newsletters that provide market analysis and non-individualized investment strategies; and operates Church product Websites comprising SermonSpice.com, ChurchStaffing.com, WorshipHouseMedia.com, SermonSearch.com, WorshipHouseKids.com, Preaching.com, ChristianJobs.com, and Youthworker.com that offer digital resources to pastors and Church leaders, as well as operates Eagle Wellness, an e-commerce site that sells nutritional supplements. Further, it offers publication of conservative, Christian, and history books, such as Ann Coulter, Dinesh D'Souza, Newt Gingrich, David Limbaugh, Ed Klein, and Mark Steyn; Xulon Press, a print-on-demand self-publishing service; and Mill City Press and Bookprinting.com that publishes books, as well as Singing News print magazine. The company was formerly known as Salem Communications Corporation and changed its name to Salem Media Group, Inc. in February 2015. Salem Media Group, Inc. was founded in 1986 and is headquartered in Camarillo, California.

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