News Corporation (NASDAQ: NWSA) and A.H. Belo (NYSE:AHC) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Earnings and Valuation

This table compares News Corporation and A.H. Belo’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
News Corporation $8.14 billion 1.13 -$738.00 million ($1.13) -14.02
A.H. Belo $259.98 million 0.40 -$19.31 million ($1.00) -4.75

A.H. Belo has higher revenue, but lower earnings than News Corporation. News Corporation is trading at a lower price-to-earnings ratio than A.H. Belo, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for News Corporation and A.H. Belo, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
News Corporation 0 2 2 0 2.50
A.H. Belo 0 0 0 0 N/A

News Corporation presently has a consensus price target of $15.50, indicating a potential downside of 2.15%. Given News Corporation’s higher possible upside, equities research analysts clearly believe News Corporation is more favorable than A.H. Belo.

Volatility & Risk

News Corporation has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500. Comparatively, A.H. Belo has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Insider and Institutional Ownership

60.8% of News Corporation shares are owned by institutional investors. Comparatively, 56.8% of A.H. Belo shares are owned by institutional investors. 13.9% of News Corporation shares are owned by insiders. Comparatively, 12.6% of A.H. Belo shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

News Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. A.H. Belo pays an annual dividend of $0.32 per share and has a dividend yield of 6.7%. News Corporation pays out -17.7% of its earnings in the form of a dividend. A.H. Belo pays out -32.0% 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. A.H. Belo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares News Corporation and A.H. Belo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
News Corporation -7.96% 2.27% 1.74%
A.H. Belo 4.26% 12.82% 6.39%

Summary

A.H. Belo beats News Corporation on 8 of the 15 factors compared between the two stocks.

About News Corporation

News Corporation is a diversified media and information services company. The Company operates in five segments: News and Information Services, Cable Network Programming, Digital Real Estate Services, Book Publishing, and Other. The Company’s business consists of range of media, including news and information services, sports programming in Australia, digital real estate services, book publishing, and pay-television (TV) distribution in Australia, that are distributed under the brands, including The Wall Street Journal, Dow Jones, Herald Sun, The Sun, The Times, HarperCollins Publishers, FOX SPORTS Australia and realestate.com.au. The Company is a developing provider of digital education content, assessment and delivery services. The Company’s business component includes News and Information Services, Cable Network Programming, Digital Real Estate Services, Book Publishing, Amplify and Foxtel. In July 2014, it completed the acquisition of Harlequin Enterprises from Torstar Corp.

About A.H. Belo

A. H. Belo Corporation is a local news and information publishing company. The Company is engaged in providing commercial printing, distribution and direct mail services, as well as media and digital marketing services. The Company operates through two segments: Publishing and Marketing, Event Marketing and Other Services (MEMO). The Company’s Publishing segment includes its print operations associated with its newspapers, publications and related Websites. The Company’s publishing segment includes the operations of The Dallas Morning News (www.dallasnews.com), a Texas newspaper, and the Denton Record-Chronicle (www.dentonrc.com), a daily newspaper operating in Denton, Texas. The Company’s MEMO segment consists of marketing, event marketing and other businesses. It offers digital marketing solutions through Your Speakeasy, LLC (Speakeasy) and DMV Digital Holdings Company, Inc., and provides event promotion and marketing services through DMN CrowdSource LLC (CrowdSource).

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