Viacom, Inc. Class B (VIAB) & Time Warner (TWX) Head to Head Analysis

Viacom, Inc. Class B (NASDAQ: VIAB) and Time Warner (NYSE:TWX) are both large-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, institutional ownership and profitability.

Insider and Institutional Ownership

78.0% of Viacom, Inc. Class B shares are owned by institutional investors. Comparatively, 78.9% of Time Warner shares are owned by institutional investors. 1.3% of Viacom, Inc. Class B shares are owned by company insiders. Comparatively, 0.2% of Time Warner 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Viacom, Inc. Class B and Time Warner, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viacom, Inc. Class B 3 18 6 0 2.11
Time Warner 0 17 5 0 2.23

Viacom, Inc. Class B presently has a consensus price target of $34.22, suggesting a potential upside of 16.19%. Time Warner has a consensus price target of $103.22, suggesting a potential upside of 4.50%. Given Viacom, Inc. Class B’s higher probable upside, analysts clearly believe Viacom, Inc. Class B is more favorable than Time Warner.

Dividends

Viacom, Inc. Class B pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. Time Warner pays an annual dividend of $1.61 per share and has a dividend yield of 1.6%. Viacom, Inc. Class B pays out 21.2% of its earnings in the form of a dividend. Time Warner pays out 25.1% 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. Viacom, Inc. Class B is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Viacom, Inc. Class B has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Time Warner has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Valuation & Earnings

This table compares Viacom, Inc. Class B and Time Warner’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Viacom, Inc. Class B $13.26 billion 0.89 $1.87 billion $3.77 7.81
Time Warner $31.27 billion 2.47 $5.25 billion $6.42 15.38

Time Warner has higher revenue and earnings than Viacom, Inc. Class B. Viacom, Inc. Class B is trading at a lower price-to-earnings ratio than Time Warner, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Viacom, Inc. Class B and Time Warner’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Viacom, Inc. Class B 16.74% 24.97% 6.76%
Time Warner 17.33% 19.99% 8.17%

Summary

Time Warner beats Viacom, Inc. Class B on 9 of the 16 factors compared between the two stocks.

Viacom, Inc. Class B Company Profile

Viacom, Inc. operates media brands that create entertainment content worldwide. The company creates television programs, motion pictures, short-form content, games, consumer products, podcasts, live events, and social media experiences. It operates through two segments, Media Networks and Filmed Entertainment. The Media Networks segment provides entertainment content and related branded products for consumers through approximately 300 locally programmed and operated TV channels, including Nickelodeon, Nick Jr., MTV, BET, Comedy Central, SPIKE, VH1, TV Land, CMT, Logo, Channel 5, Telefe, Colors, Paramount Channel, TeenNick, Nicktoons, Nick Music, MTV2, MTV Classic, MTV Live, BET Her, BET Gospel, and BET Hip Hop, as well as through online, mobile, and apps. The Filmed Entertainment segment produces, finances, acquires, and distributes motion pictures, television programming, and other entertainment content under the Paramount Pictures, Paramount Players, Paramount Animation, Paramount Television, Nickelodeon Movies, and MTV Films brands. This segment exhibits motion pictures theatrically through home entertainment, licensing to television and digital platforms, and ancillary activities. The company releases its content through DVDs, Blu-ray discs, transactional video-on-demand, subscription video-on-demand, pay television, cable television, free television, and free video-on-demand, as well as airlines and hotels. Viacom, Inc. is headquartered in New York, New York.

Time Warner Company Profile

Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates through three segments: Turner, Home Box Office, and Warner Bros. The Turner segment creates and programs branded news, entertainment, sports, and kids multi-platform content for consumers. It operates approximately 175 channels in 200 countries and territories. The Turner segment's networks and related businesses and brands include TNT, TBS, Adult Swim, truTV, Turner Classic Movies, Turner Sports, Bleacher Report, Cartoon Network, Boomerang, CNN, HLN, and iStreamPlanet; and digital properties comprise tntdrama.com, TBS.com, adultswim.com, and cartoonnetwork.com, as well as NBA.com, the NBA League Pass property, NCAA.com, the NCAA March Madness Live app, and PGA.com. It also licenses its original programming, and its brands and characters for consumer products and other business ventures. The Home Box Office segment provides premium pay and basic tier television, and video content services comprising HBO and Cinemax; operates HBO NOW, a video content service; and sells original programming through physical and digital formats, as well as licenses original programming through international television networks and video content services. As of December 31, 2017, this segment had 54 million domestic subscribers. The Warner Bros. segment produces, distributes, and licenses television programming and feature films; distributes digital and physical home entertainment products; and produces and distributes games, as well as licenses consumer products and brands. Time Warner Inc. serves cable system operators, satellite service distributors, telephone companies, and virtual multichannel video programming distributors, as well as digital distributors. The company was formerly known as AOL Time Warner, Inc. and changed its name to Time Warner Inc. in 2003. Time Warner Inc. was founded in 1985 and is headquartered in New York, New York.

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