Contrasting News (NWSA) & A.H. Belo (NYSE:AHC)

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

Volatility and Risk

A.H. Belo has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, News has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
A.H. Belo -8.59% 1.70% 0.80%
News -7.96% 2.27% 1.74%

Institutional & Insider Ownership

57.2% of A.H. Belo shares are held by institutional investors. Comparatively, 61.0% of News shares are held by institutional investors. 12.6% of A.H. Belo shares are held by company insiders. Comparatively, 13.9% of News shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares A.H. Belo and News’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
A.H. Belo $259.98 million 0.41 -$19.31 million ($1.00) -4.95
News $8.14 billion 1.16 -$738.00 million ($1.13) -14.34

A.H. Belo has higher earnings, but lower revenue than News. News 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.

Dividends

A.H. Belo pays an annual dividend of $0.32 per share and has a dividend yield of 6.5%. News pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. A.H. Belo pays out -32.0% of its earnings in the form of a dividend. News pays out -17.7% 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.

Analyst Ratings

This is a breakdown of recent recommendations for A.H. Belo and News, as provided by MarketBeat.com.

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

News has a consensus target price of $15.50, suggesting a potential downside of 4.32%. Given News’ higher probable upside, analysts plainly believe News is more favorable than A.H. Belo.

Summary

News beats A.H. Belo on 10 of the 15 factors compared between the two stocks.

A.H. Belo Company Profile

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).

News Company Profile

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.

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