LIN Media (NYSE: TVL) and Discovery Communications (NASDAQ:DISCA) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

46.2% of Discovery Communications shares are held by institutional investors. 6.8% of Discovery Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for LIN Media and Discovery Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LIN Media 0 0 0 0 N/A
Discovery Communications 3 11 3 0 2.00

Discovery Communications has a consensus price target of $24.36, indicating a potential upside of 39.18%.

Valuation & Earnings

This table compares LIN Media and Discovery Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
LIN Media N/A N/A N/A $2.87 N/A
Discovery Communications $6.50 billion 1.02 $1.19 billion $1.91 9.16

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

Profitability

This table compares LIN Media and Discovery Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LIN Media N/A N/A N/A
Discovery Communications 16.63% 22.24% 6.83%

Summary

Discovery Communications beats LIN Media on 7 of the 8 factors compared between the two stocks.

About LIN Media

LIN Media LLC (LIN Media) is a local multimedia company. The Company operates or services 43 television stations and seven digital channels in 23 of the United States markets, and a portfolio of Websites, applications and mobile products. Its television stations deliver local news, community service, and sports and entertainment programming to viewers, reaching 10.5% of homes owning televisions in the United States. In April 2013, it acquired a majority ownership position in HYFN. On July 30, 2013, LIN Media announced that it had completed its merger with LIN TV Corp., with LIN Media, as the surviving company in the merger. In February 2014, the Company acquired Federated Media Publishing, Inc.

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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