Discovery Communications (NASDAQ: DISCA) and AMC Networks (NASDAQ:AMCX) are both mid-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.
Valuation and Earnings
This table compares Discovery Communications and AMC Networks’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Discovery Communications||$6.59 billion||1.98||$2.48 billion||$1.89||12.12|
|AMC Networks||$2.79 billion||1.47||$859.59 million||$4.63||13.27|
Discovery Communications has higher revenue and earnings than AMC Networks. Discovery Communications is trading at a lower price-to-earnings ratio than AMC Networks, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
44.3% of Discovery Communications shares are owned by institutional investors. Comparatively, 81.9% of AMC Networks shares are owned by institutional investors. 5.8% of Discovery Communications shares are owned by company insiders. Comparatively, 17.7% of AMC Networks shares are owned by company 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.
This is a summary of recent ratings and price targets for Discovery Communications and AMC Networks, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Discovery Communications presently has a consensus price target of $28.25, suggesting a potential upside of 23.31%. AMC Networks has a consensus price target of $59.44, suggesting a potential downside of 3.22%. Given Discovery Communications’ higher probable upside, equities analysts plainly believe Discovery Communications is more favorable than AMC Networks.
Volatility and Risk
Discovery Communications has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, AMC Networks has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.
This table compares Discovery Communications and AMC Networks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
AMC Networks beats Discovery Communications on 8 of the 14 factors compared between the two stocks.
Discovery Communications Company Profile
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.
AMC Networks Company Profile
AMC Networks Inc. is a holding company, which conducts all of its operations through its subsidiaries. The Company owns and operates entertainment businesses and assets. It operates through two segments: National Networks, and International and Other. National Networks includes activities of its programming businesses, which include its programming networks distributed in the United States and Canada. The International and Other segment includes AMC Networks International (AMCNI), the Company’s international programming businesses consisting of a portfolio of channels in Europe, Latin America, the Middle East and parts of Asia and Africa; IFC Films, the Company’s independent film distribution business; AMCNI- DMC, the broadcast solutions unit of certain networks of AMCNI and third-party networks, and various developing online content distribution initiatives. National Networks’ programming networks include AMC, WE tv, BBC AMERICA and SundanceTV.
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