News (NASDAQ:NWSA – Get Free Report) and Cable One (NYSE:CABO – Get Free Report) are both communication services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.
Insider & Institutional Ownership
67.0% of News shares are owned by institutional investors. Comparatively, 89.9% of Cable One shares are owned by institutional investors. 11.6% of News shares are owned by insiders. Comparatively, 0.9% of Cable One shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares News and Cable One’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| News | 6.76% | 7.42% | 4.45% |
| Cable One | -112.20% | -22.87% | -3.53% |
Risk and Volatility
News has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Cable One has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.
Dividends
News pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Cable One pays an annual dividend of $11.80 per share and has a dividend yield of 312.7%. News pays out 17.9% of its earnings in the form of a dividend. Cable One pays out -4.3% 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. Cable One is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of current recommendations for News and Cable One, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| News | 0 | 1 | 6 | 0 | 2.86 |
| Cable One | 2 | 4 | 0 | 0 | 1.67 |
News presently has a consensus target price of $37.80, suggesting a potential upside of 42.05%. Cable One has a consensus target price of $80.00, suggesting a potential upside of 2,020.33%. Given Cable One’s higher probable upside, analysts clearly believe Cable One is more favorable than News.
Valuation and Earnings
This table compares News and Cable One”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| News | $9.16 billion | 1.57 | $573.00 million | $1.12 | 23.76 |
| Cable One | $1.40 billion | 0.02 | -$356.46 million | ($275.24) | -0.01 |
News has higher revenue and earnings than Cable One. Cable One is trading at a lower price-to-earnings ratio than News, indicating that it is currently the more affordable of the two stocks.
Summary
News beats Cable One on 12 of the 16 factors compared between the two stocks.
About News
News Corporation is a global media and information services company. Its businesses include Dow Jones, which provides financial news and data through outlets such as The Wall Street Journal; HarperCollins, a book publisher; and News Corp’s news media operations, which publish newspapers and digital news services. The company also operates digital real estate businesses, including Realtor.com in the United States and REA Group in Australia. Its brands and services reach audiences and customers across the Americas, Europe, Australia and other international markets.
About Cable One
Cable One, Inc. is a broadband communications provider serving residential and business customers in smaller cities and rural communities across the United States. The company operates primarily under the Sparklight brand and provides connectivity services over its cable and fiber networks. Its consumer offerings include high-speed internet, video entertainment and traditional voice services, along with related products such as Wi-Fi solutions and streaming-oriented television options. For business customers, Cable One provides internet access, data connectivity, communications services and other technology solutions designed for organizations of various sizes.
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