Cumulus Media (NASDAQ: CMLS) and Salem Media Group (NASDAQ:SALM) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitabiliy, institutional ownership, dividends and earnings.

Dividends

Salem Media Group pays an annual dividend of $0.26 per share and has a dividend yield of 3.6%. Cumulus Media does not pay a dividend. Salem Media Group pays out 72.2% of its earnings in the form of a dividend.

Profitability

This table compares Cumulus Media and Salem Media Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cumulus Media -44.30% -216.43% -0.45%
Salem Media Group 3.49% 6.42% 2.32%

Institutional & Insider Ownership

67.0% of Cumulus Media shares are held by institutional investors. Comparatively, 29.7% of Salem Media Group shares are held by institutional investors. 13.5% of Cumulus Media shares are held by company insiders. Comparatively, 60.0% of Salem Media Group shares are held 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.

Volatility & Risk

Cumulus Media has a beta of 3.54, meaning that its share price is 254% more volatile than the S&P 500. Comparatively, Salem Media Group has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Earnings & Valuation

This table compares Cumulus Media and Salem Media Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cumulus Media $1.14 billion 0.01 $202.03 million ($17.24) -0.03
Salem Media Group $274.73 million 0.68 $46.50 million $0.36 20.00

Cumulus Media has higher revenue and earnings than Salem Media Group. Cumulus Media is trading at a lower price-to-earnings ratio than Salem Media Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Cumulus Media and Salem Media Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cumulus Media 0 1 0 0 2.00
Salem Media Group 0 0 0 0 N/A

Summary

Salem Media Group beats Cumulus Media on 7 of the 12 factors compared between the two stocks.

About Cumulus Media

Cumulus Media Inc. (Cumulus) is a radio broadcasting company. The Company is also a provider of country music and lifestyle content through its NASH brand, which serves through radio programming, NASH Country Weekly magazine and live events. Its product lines include broadcast advertising, digital advertising, political advertising and non-advertising based license fees. Its broadcast advertising includes the sale of commercial advertising time to local, national and network clients. Its digital advertising includes the sale of advertising and promotional opportunities across its Websites and mobile applications. Its across the nation platform generates content distributable through both broadcast and digital platforms. Its categories of advertisers consist of amusement and recreation; banking and mortgage; furniture and home furnishings; arts and entertainment; food and beverage services; healthcare services; automotive dealers; food and beverage stores, and telecommunications.

About Salem Media Group

Salem Media Group, Inc., formerly Salem Communications Corporation, is a multi-media company specializing in Christian and Conservative content, with media properties consisting of radio broadcasting, digital media, and book, magazine and newsletter publishing. The Company operates through three segments: Broadcast, Digital Media and Publishing. The Company’s broadcasting segment is engaged in the ownership and operation of radio stations in metropolitan markets. The Company’s radio stations carry national and local programming content, as well as national and local advertisers. The Company’s Digital Media segment focuses on Web-based platform designed for audiences interested in Christian and family-themed content and conservative news. The Company’s publishing segment consists of Regnery Publishing, Xulon Press and Salem Publishing. The Company owns and operates approximately 116 radio stations in over 40 markets.

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