Head-To-Head Comparison: Scholastic (NASDAQ:SCHL) vs. Sirius XM (NASDAQ:SIRI)

Sirius XM (NASDAQ:SIRI) and Scholastic (NASDAQ:SCHL) are both communication services companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.

Dividends

Sirius XM pays an annual dividend of $1.08 per share and has a dividend yield of 3.2%. Scholastic pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Sirius XM pays out 44.3% of its earnings in the form of a dividend. Scholastic pays out 71.4% 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 increased its dividend for 7 consecutive years. Sirius XM is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sirius XM	$8.56 billion	1.31	$805.00 million	$2.44	13.63
Scholastic	$1.57 billion	0.44	$56.70 million	$1.40	26.35

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

Volatility and Risk

Sirius XM has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Scholastic has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Sirius XM and Scholastic, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sirius XM	3	7	9	0	2.32
Scholastic	0	3	0	0	2.00

Sirius XM currently has a consensus price target of $32.92, indicating a potential downside of 1.00%. Scholastic has a consensus price target of $35.00, indicating a potential downside of 5.11%. Given Sirius XM’s stronger consensus rating and higher probable upside, analysts clearly believe Sirius XM is more favorable than Scholastic.

Institutional and Insider Ownership

10.7% of Sirius XM shares are owned by institutional investors. Comparatively, 82.6% of Scholastic shares are owned by institutional investors. 3.3% of Sirius XM shares are owned by company insiders. Comparatively, 12.8% of Scholastic shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sirius XM	10.47%	9.42%	4.10%
Scholastic	3.60%	5.00%	2.22%

Summary

Sirius XM beats Scholastic on 13 of the 17 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 Scholastic

Scholastic Corporation publishes and distributes children’s books worldwide. It operates in three segments: Children’s Book Publishing and Distribution, Education Solutions, and International. The Children’s Book Publishing and Distribution segment engages in publication and distribution of children’s print, digital, and audio books, as well as media and interactive products through its school reading events and trade channel; and operation of school-based book clubs and book fairs in the United States. Its original publications include The Harry Potter, The Hunger Games, The Bad Guys, The Baby-Sitters Club, The Magic School Bus, Captain Underpants, Dog Man, Wings of Fire, Cat Kid Comic Club, and Clifford The Big Red Dog, as well as I Survived, Goosebumps; licensed properties comprising the Peppa Pig and Pokemon; and publishes and creates Klutz and Make Believe Ideas titles, such as Mini Shake Shop, Pokemon Stained Glass, LEGO Miniature Photography, and the Never Touch series. The Education Solutions segment publishes and distributes classroom magazines under the Scholastic News, Scholastic Scope, Storyworks, Let’s Find Out, and Junior Scholastic names; supplemental and classroom materials and programs, and related support services; and print and on-line reference, and non-fiction products, as well as consulting services. The International segment publishes and distributes English, Hindi, and French language children’s books; and operates school-based marketing channels, as well as supply original and licensed children’s books, and supplemental educational materials including professional books for teachers. It distributes its products and services directly to schools and libraries through retail stores and the Internet. The company was founded in 1920 and is headquartered in New York, New York.