Analyzing Discovery Communications (DISCB) and Entravision Communications Corporation (EVC)
Discovery Communications (NASDAQ: DISCB) and Entravision Communications Corporation (NYSE:EVC) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.
This table compares Discovery Communications and Entravision Communications Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Entravision Communications Corporation||7.03%||10.05%||3.50%|
Institutional and Insider Ownership
58.3% of Entravision Communications Corporation shares are owned by institutional investors. 20.7% of Entravision Communications Corporation 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.
Entravision Communications Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 3.5%. Discovery Communications does not pay a dividend. Entravision Communications Corporation pays out 95.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Discovery Communications has increased its dividend for 3 consecutive years.
Earnings and Valuation
This table compares Discovery Communications and Entravision Communications Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Discovery Communications||$6.59 billion||1.98||$2.48 billion||$1.89||12.12|
|Entravision Communications Corporation||$263.59 million||1.43||$61.52 million||$0.21||27.14|
Discovery Communications has higher revenue and earnings than Entravision Communications Corporation. Discovery Communications is trading at a lower price-to-earnings ratio than Entravision Communications Corporation, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Discovery Communications has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500. Comparatively, Entravision Communications Corporation has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Discovery Communications and Entravision Communications Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Entravision Communications Corporation||0||2||1||0||2.33|
Entravision Communications Corporation has a consensus target price of $7.00, indicating a potential upside of 22.81%. Given Entravision Communications Corporation’s higher possible upside, analysts plainly believe Entravision Communications Corporation is more favorable than Discovery Communications.
Discovery Communications beats Entravision Communications Corporation on 10 of the 16 factors compared between the two stocks.
About Discovery Communications
Discovery Communications, Inc. (Discovery) is a global media company. The Company provides content across multiple distribution platforms, including pay-television (pay-TV), free-to-air (FTA) and broadcast television, Websites, digital distribution arrangements and content licensing agreements. Its segments include U.S. Networks, which consists principally of domestic television networks and digital content services; International Networks, consisting primarily of international television networks and digital content services, and Education and Other, which consists principally of curriculum-based product and service offerings, and production studios. The Company’s portfolio of networks includes television brands, such as Discovery Channel, Animal Planet, ID, Velocity (known as Turbo outside of the United States) and Eurosport. It is also engaged in extending content distribution across various platforms, including brand-aligned Websites, Web-native networks and online streaming.
About Entravision Communications Corporation
Entravision Communications Corporation is a media company. The Company reaches and engages Hispanics in the United States and certain border markets of Mexico across media channels and advertising platforms. The Company operates through three segments: television broadcasting, radio broadcasting and digital media. As of December 31, 2016, the Company owned and operated 54 television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, District of Columbia. It owns and operates Spanish-language radio stations in the United States. As of December 31, 2016, its radio stations consisted of 38 frequency modulation (FM) and 11 amplitude modulation (AM) stations located in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas. The digital media segment provides digital advertising solutions that allow advertisers to reach online Hispanic audiences throughout the United States and Mexico.
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