Reviewing FOX (NASDAQ:FOX) & Sirius XM (NASDAQ:SIRI)

Sirius XM (NASDAQ:SIRI) and FOX (NASDAQ:FOX) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Earnings and Valuation

This table compares Sirius XM and FOX”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sirius XM	$8.90 billion	0.82	-$1.67 billion	$2.83	7.64
FOX	$16.30 billion	1.62	$2.26 billion	$4.45	13.33

FOX has higher revenue and earnings than Sirius XM. Sirius XM is trading at a lower price-to-earnings ratio than FOX, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Sirius XM has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, FOX has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Insider and Institutional Ownership

10.7% of Sirius XM shares are held by institutional investors. Comparatively, 26.4% of FOX shares are held by institutional investors. 3.3% of Sirius XM shares are held by insiders. Comparatively, 23.1% of FOX shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Sirius XM and FOX, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sirius XM	3	3	3	1	2.20
FOX	0	1	3	1	3.00

Sirius XM presently has a consensus price target of $24.29, indicating a potential upside of 12.28%. FOX has a consensus price target of $81.67, indicating a potential upside of 37.62%. Given FOX’s stronger consensus rating and higher probable upside, analysts plainly believe FOX is more favorable than Sirius XM.

Dividends

Sirius XM pays an annual dividend of $1.08 per share and has a dividend yield of 5.0%. FOX pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Sirius XM pays out 38.2% of its earnings in the form of a dividend. FOX pays out 12.6% 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. Sirius XM has raised its dividend for 7 consecutive years and FOX has raised its dividend for 4 consecutive years. Sirius XM is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Sirius XM and FOX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sirius XM	-26.41%	3.73%	1.51%
FOX	12.35%	18.61%	9.60%

Summary

FOX beats Sirius XM on 13 of the 16 factors compared between the two stocks.

About Sirius XM

Sirius XM Holdings Inc. operates as an audio entertainment company in North America. It operates in two segments, Sirius XM, and Pandora and Off-platform. The company’s Sirius XM segment provides music, sports, entertainment, comedy, talk, news, traffic and weather channels, and other content, as well as podcast and infotainment services on subscription fee basis; and live, curated, and exclusive and on demand programming services through satellite radio systems and streamed through applications for mobile and home devices, and other consumer electronic equipment. This segment also distributes satellite radios through automakers and retailers, as well as its website; podcasts, including true crime, news, politics, music, comedy, sports, and entertainment; and offers location-based services through two-way wireless connectivity, including safety, security, convenience, maintenance and data, remote vehicles diagnostic, and stolen or parked vehicle locator services. In addition, this segment provides music channels on the DISH Network satellite television service as a programming package; Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedule and scores, and movie listings; graphic information related to road closings, traffic flow, and incident data for consumers with in-vehicle navigation systems; real-time weather services in vehicles, boats, and planes; and music programming and commercial-free music services for office, restaurants, and other business. Its Pandora and Off-platform segment operates music, comedy, and podcast streaming platform, which offers personalized experience for listener through computers, tablets, mobile devices, vehicle speakers, and connected devices; and provides advertising services. The company was incorporated in 2013 and is headquartered in New York.

About FOX

Fox Corporation operates as a news, sports, and entertainment company in the United States (U.S.). The company operates through four segments: Cable Network Programming, Television, Credible, and The FOX Studio Lot. The Cable Network Programming segment produces and licenses news and sports content for distribution through traditional cable television systems, direct broadcast satellite operators and telecommunication companies, virtual multi-channel video programming distributors, and other digital platforms primarily in the U.S. Television segment produces, acquires, markets, and distributes programming through the FOX broadcast network, advertising supported video-on-demand service Tubi, and operates power broadcast television stations including duopolies and other digital platform; and produces content for third parties. The Credible segment engages in the consumer finance marketplace. The FOX Studio Lot segment provides television and film production services along with office space, studio operation services and includes all operations of the facility. The company was incorporated in 2018 and is headquartered in New York, New York.