Financial Contrast: Nexstar Broadcasting Group (NXST) vs. Discovery Communications (DISCA)
Nexstar Broadcasting Group (NASDAQ: NXST) and Discovery Communications (NASDAQ:DISCA) are both mid-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.
Earnings and Valuation
This table compares Nexstar Broadcasting Group and Discovery Communications’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Nexstar Broadcasting Group||$1.75 billion||1.55||$608.81 million||$2.46||23.90|
|Discovery Communications||$6.59 billion||1.82||$2.48 billion||$1.89||11.11|
Discovery Communications has higher revenue and earnings than Nexstar Broadcasting Group. Discovery Communications is trading at a lower price-to-earnings ratio than Nexstar Broadcasting Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Nexstar Broadcasting Group has a beta of 2.27, suggesting that its stock price is 127% more volatile than the S&P 500. Comparatively, Discovery Communications has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.
Nexstar Broadcasting Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.0%. Discovery Communications does not pay a dividend. Nexstar Broadcasting Group pays out 48.8% of its earnings in the form of a dividend.
Insider & Institutional Ownership
45.9% of Discovery Communications shares are held by institutional investors. 8.4% of Nexstar Broadcasting Group shares are held by company insiders. Comparatively, 6.8% of Discovery Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This is a breakdown of current ratings and recommmendations for Nexstar Broadcasting Group and Discovery Communications, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Nexstar Broadcasting Group||0||0||7||0||3.00|
Nexstar Broadcasting Group currently has a consensus target price of $78.57, indicating a potential upside of 33.62%. Discovery Communications has a consensus target price of $27.27, indicating a potential upside of 29.84%. Given Nexstar Broadcasting Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Nexstar Broadcasting Group is more favorable than Discovery Communications.
This table compares Nexstar Broadcasting Group and Discovery Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Nexstar Broadcasting Group||5.44%||18.35%||2.62%|
About Nexstar Broadcasting Group
Nexstar Media Group, Inc., formerly Nexstar Broadcasting Group, Inc., is a television broadcasting and digital media company. The Company is focused on the acquisition, development and operation of television stations and interactive community Websites, and digital media services in medium-sized markets in the United States. The Company’s segments include Broadcasting and Other. The Company’s broadcast segment includes television stations and related community-focused Websites that it owns, operates, programs or provides sales and other services to in various markets across the United States. The other activities of the Company include corporate functions, eliminations and other operations. As of December 31, 2016, it owned, operated, programmed or provided sales and other services to 104 full power television stations in 62 markets in the states of Alabama, Arizona, Arkansas, California, Colorado, Florida, New York, Utah, Vermont, Virginia, West Virginia and Wisconsin, among others.
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.
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