Viacom (NASDAQ: VIA) and Twenty-First Century Fox (NASDAQ:FOXA) are both large-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Dividends

Viacom pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. Twenty-First Century Fox pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. Viacom pays out 22.0% of its earnings in the form of a dividend. Twenty-First Century Fox pays out 22.6% 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. Viacom is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and target prices for Viacom and Twenty-First Century Fox, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viacom 1 6 5 0 2.33
Twenty-First Century Fox 0 5 16 0 2.76

Viacom currently has a consensus price target of $43.00, indicating a potential upside of 17.17%. Twenty-First Century Fox has a consensus price target of $33.53, indicating a potential upside of 29.45%. Given Twenty-First Century Fox’s stronger consensus rating and higher probable upside, analysts clearly believe Twenty-First Century Fox is more favorable than Viacom.

Valuation & Earnings

This table compares Viacom and Twenty-First Century Fox’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Viacom $13.17 billion 1.12 $2.92 billion $3.64 10.08
Twenty-First Century Fox $28.50 billion 1.68 $7.11 billion $1.59 16.29

Twenty-First Century Fox has higher revenue and earnings than Viacom. Viacom is trading at a lower price-to-earnings ratio than Twenty-First Century Fox, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

2.3% of Viacom shares are held by institutional investors. Comparatively, 53.3% of Twenty-First Century Fox shares are held by institutional investors. 0.7% of Viacom shares are held by insiders. Comparatively, 20.1% of Twenty-First Century Fox shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Viacom and Twenty-First Century Fox’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Viacom 11.04% 30.89% 6.39%
Twenty-First Century Fox 10.36% 22.46% 7.19%

Risk and Volatility

Viacom has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500. Comparatively, Twenty-First Century Fox has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Summary

Twenty-First Century Fox beats Viacom on 10 of the 16 factors compared between the two stocks.

Viacom Company Profile

Viacom Inc. offers global media brands that create television programs, motion pictures, short-form content, applications, games, consumer products, social media experiences and other entertainment content. As of September 30, 2016, the Company offered its services for audiences in more than 180 countries. The Company operates through two segments: Media Networks and Filmed Entertainment. The Media Networks segment creates, acquires and distributes programming and other content for audiences The Media Networks segment provides entertainment content and related branded products for advertisers, content distributors and retailers. The Filmed Entertainment segment produces, finances, acquires and distributes motion pictures, television programming and other entertainment content under the Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Animation, Insurge Pictures, Nickelodeon Movies, MTV Films and Paramount Television brands.

Twenty-First Century Fox Company Profile

Twenty-First Century Fox, Inc. is a media and entertainment company. The Company’s segments include Cable Network Programming; Television; Filmed Entertainment, and Other, Corporate and Eliminations. The Cable Network Programming segment produces and licenses news, business news, sports, general entertainment, factual entertainment and movie programming for distribution. The Television segment is engaged in the operation of broadcast television stations and the broadcasting of network programming in the United States. The Filmed Entertainment segment is engaged in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media, and the production and licensing of television programming around the world. The Other, Corporate and Eliminations segment consists primarily of corporate overhead and eliminations, and other businesses.

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