News (NASDAQ: NWS) and Gannett (NYSE:GCI) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.
Insider & Institutional Ownership
10.2% of News shares are held by institutional investors. Comparatively, 89.5% of Gannett shares are held by institutional investors. 39.4% of News shares are held by insiders. Comparatively, 1.1% of Gannett shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares News and Gannett’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
News pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Gannett pays an annual dividend of $0.64 per share and has a dividend yield of 6.7%. Gannett pays out 62.1% of its earnings in the form of a dividend. Gannett has increased its dividend for 2 consecutive years. Gannett is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings for News and Gannett, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Risk and Volatility
News has a beta of 1.83, indicating that its share price is 83% more volatile than the S&P 500. Comparatively, Gannett has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.
Earnings and Valuation
This table compares News and Gannett’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|News||$8.14 billion||1.16||-$738.00 million||N/A||N/A|
|Gannett||$3.15 billion||0.34||$6.88 million||$1.03||9.28|
Gannett has lower revenue, but higher earnings than News.
Gannett beats News on 7 of the 13 factors compared between the two stocks.
News Corporation is a diversified media and information services company. The Company operates in five segments: News and Information Services, Cable Network Programming, Digital Real Estate Services, Book Publishing, and Other. The Company’s business consists of range of media, including news and information services, sports programming in Australia, digital real estate services, book publishing, and pay-television (TV) distribution in Australia, that are distributed under the brands, including The Wall Street Journal, Dow Jones, Herald Sun, The Sun, The Times, HarperCollins Publishers, FOX SPORTS Australia and realestate.com.au. The Company is a developing provider of digital education content, assessment and delivery services. The Company’s business component includes News and Information Services, Cable Network Programming, Digital Real Estate Services, Book Publishing, Amplify and Foxtel. In July 2014, it completed the acquisition of Harlequin Enterprises from Torstar Corp.
Gannett Co., Inc. operates as a media and marketing solutions company. The company operates through Publishing and ReachLocal segments. The company offers print and digital daily and non-daily publications under the USA TODAY NETWORK brand name in the United States; and Newsquest, which has print and online publications portfolio of approximately 170 news brands and 80 magazines in the United Kingdom. Gannett Co., Inc. operations comprise 130 daily publications and digital platforms the United States and the United Kingdom; and 435 non-daily publications in the United States and 159 such titles in the United Kingdom. It also provides commercial printing, distribution, marketing, and data services; and owns s1 and Exchange & Mart businesses, and a specialist magazine business. In addition, the company offers digital marketing solutions comprising ReachSearch, ReachDisplay, ReachSocial Ads, and ReachRetargeting digital advertising solutions; ReachSite+ReachEdge, ReachSEO, ReachCast, ReachListings, and TotalLiveChat Web presence solutions; and ReachEdge, a marketing automation platform, as well as Kickserv, a cloud-based business management software for service businesses. The company offers its suite of products and solutions to local businesses through its proprietary technology platform, its sales force, and third-party agencies and resellers. It also operates in Canada, Australia, New Zealand, Japan, Germany, Austria, Brazil, and Mexico. The company was formerly known as Gannett SpinCo, Inc. and changed its name to Gannett Co., Inc. in May 2015. Gannett Co., Inc. was incorporated in 2014 and is headquartered in McLean, Virginia.
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