Analyzing FOX (NASDAQ:FOXA) & Sirius XM (NASDAQ:SIRI)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FOX	11.41%	18.14%	9.40%
Sirius XM	9.41%	8.93%	3.73%

Valuation & Earnings

This table compares FOX and Sirius XM”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FOX	$16.30 billion	1.57	$2.26 billion	$4.16	14.48
Sirius XM	$8.56 billion	0.92	$805.00 million	$2.24	10.48

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

Dividends

FOX pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Sirius XM pays an annual dividend of $1.08 per share and has a dividend yield of 4.6%. FOX pays out 13.5% of its earnings in the form of a dividend. Sirius XM pays out 48.2% 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. FOX has increased its dividend for 4 consecutive years and 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.

Volatility & Risk

FOX has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Sirius XM has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for FOX and Sirius XM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FOX	1	9	7	0	2.35
Sirius XM	3	4	3	0	2.00

FOX presently has a consensus price target of $72.93, indicating a potential upside of 21.10%. Sirius XM has a consensus price target of $24.44, indicating a potential upside of 4.15%. Given FOX’s stronger consensus rating and higher possible upside, analysts clearly believe FOX is more favorable than Sirius XM.

Insider and Institutional Ownership

52.5% of FOX shares are owned by institutional investors. Comparatively, 10.7% of Sirius XM shares are owned by institutional investors. 19.7% of FOX shares are owned by company insiders. Comparatively, 3.3% of Sirius XM shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

FOX beats Sirius XM on 14 of the 17 factors compared between the two stocks.

About FOX

Fox Corporation operates as a news, sports, and entertainment company in the United States (U.S.). The company operates through four segments: Cable Network Programming, Television, Credible, and The FOX Studio Lot. The Cable Network Programming segment produces and licenses news and sports content for distribution through traditional cable television systems, direct broadcast satellite operators and telecommunication companies, virtual multi-channel video programming distributors, and other digital platforms primarily in the U.S. Television segment produces, acquires, markets, and distributes programming through the FOX broadcast network, advertising supported video-on-demand service Tubi, and operates power broadcast television stations including duopolies and other digital platform; and produces content for third parties. The Credible segment engages in the consumer finance marketplace. The FOX Studio Lot segment provides television and film production services along with office space, studio operation services and includes all operations of the facility. The company was incorporated in 2018 and is headquartered in New York, New York.

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.