Entercom Communications Corporation (NYSE: ETM) and Salem Media Group (NASDAQ:SALM) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitabiliy, institutional ownership and dividends.

Volatility and Risk

Entercom Communications Corporation has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Salem Media Group has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Institutional and Insider Ownership

50.5% of Entercom Communications Corporation shares are held by institutional investors. Comparatively, 29.7% of Salem Media Group shares are held by institutional investors. 32.6% of Entercom Communications Corporation 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.

Analyst Recommendations

This is a summary of current ratings for Entercom Communications Corporation and Salem Media Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Entercom Communications Corporation 0 0 1 0 3.00
Salem Media Group 0 0 0 0 N/A

Profitability

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

Net Margins Return on Equity Return on Assets
Entercom Communications Corporation 5.27% 8.79% 3.28%
Salem Media Group 3.49% 6.42% 2.32%

Earnings & Valuation

This table compares Entercom Communications Corporation and Salem Media Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Entercom Communications Corporation $461.59 million 0.85 $101.22 million $0.56 17.23
Salem Media Group $274.73 million 0.68 $46.50 million $0.36 19.86

Entercom Communications Corporation has higher revenue and earnings than Salem Media Group. Entercom Communications Corporation 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.

Dividends

Entercom Communications Corporation pays an annual dividend of $0.30 per share and has a dividend yield of 3.1%. Salem Media Group pays an annual dividend of $0.26 per share and has a dividend yield of 3.6%. Entercom Communications Corporation pays out 53.6% of its earnings in the form of a dividend. Salem Media Group pays out 72.2% 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.

Summary

Entercom Communications Corporation beats Salem Media Group on 11 of the 14 factors compared between the two stocks.

About Entercom Communications Corporation

Entercom Communications Corp. is a radio broadcasting company. The Company sells advertising time to local, regional and national advertisers and national network advertisers, purchasing spot commercials in varying lengths. It focuses on station-related digital platforms, which allow for audience interaction and participation, and integrated local digital marketing solutions and station events. Its stations are classified by their format, such as news, sports, talk, classic rock, urban, adult contemporary, alternative and country, among others. As of December 31, 2016, it had a portfolio of radio stations in 28 markets across the United States. It operates in various markets, which include Boston, Buffalo, Denver, Kansas City, Miami, Sacramento, San Francisco and Seattle. Its radio stations include KSWD Frequency Modulation (FM), KOSI FM, KYGO FM, KEPN AM, KKFN FM, KQKS FM, KRWZ Amplitude Modulation (AM), WSTR FM, WAXY AM/FM, WLYF FM, WMXJ FM, KBZT FM, KSON FM/KSOQ FM and KIFM FM.

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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