Entercom Communications Corporation (NYSE: ETM) and Salem Media Group (NASDAQ:SALM) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Entercom Communications Corporation and Salem Media Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Entercom Communications Corporation 0 0 1 0 3.00
Salem Media Group 0 0 1 0 3.00

Valuation and Earnings

This table compares Entercom Communications Corporation and Salem Media Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Entercom Communications Corporation $465.64 million 0.73 $96.71 million $0.45 22.67
Salem Media Group $273.06 million 0.65 $46.09 million $0.28 24.46

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

Profitability

This table compares Entercom Communications Corporation and Salem Media Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Entercom Communications Corporation 4.27% 8.50% 3.19%
Salem Media Group 2.75% 6.26% 2.28%

Dividends

Entercom Communications Corporation pays an annual dividend of $0.30 per share and has a dividend yield of 2.9%. Salem Media Group pays an annual dividend of $0.26 per share and has a dividend yield of 3.8%. Entercom Communications Corporation pays out 66.7% of its earnings in the form of a dividend. Salem Media Group pays out 92.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

Entercom Communications Corporation has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Salem Media Group has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Insider and Institutional Ownership

49.6% of Entercom Communications Corporation shares are owned by institutional investors. Comparatively, 29.5% of Salem Media Group shares are owned by institutional investors. 32.6% of Entercom Communications Corporation shares are owned by insiders. Comparatively, 60.0% of Salem Media Group shares are owned 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.

Summary

Entercom Communications Corporation beats Salem Media Group on 10 of the 13 factors compared between the two stocks.

About Entercom Communications Corporation

Entercom Communications Corp. is a radio broadcasting company. The Company sells advertising time to local, regional and national advertisers and national network advertisers, purchasing spot commercials in varying lengths. It focuses on station-related digital platforms, which allow for audience interaction and participation, and integrated local digital marketing solutions and station events. Its stations are classified by their format, such as news, sports, talk, classic rock, urban, adult contemporary, alternative and country, among others. As of December 31, 2016, it had a portfolio of radio stations in 28 markets across the United States. It operates in various markets, which include Boston, Buffalo, Denver, Kansas City, Miami, Sacramento, San Francisco and Seattle. Its radio stations include KSWD Frequency Modulation (FM), KOSI FM, KYGO FM, KEPN AM, KKFN FM, KQKS FM, KRWZ Amplitude Modulation (AM), WSTR FM, WAXY AM/FM, WLYF FM, WMXJ FM, KBZT FM, KSON FM/KSOQ FM and KIFM FM.

About Salem Media Group

Salem Media Group, Inc., formerly Salem Communications Corporation, is a multi-media company specializing in Christian and Conservative content, with media properties consisting of radio broadcasting, digital media, and book, magazine and newsletter publishing. The Company operates through three segments: Broadcast, Digital Media and Publishing. The Company’s broadcasting segment is engaged in the ownership and operation of radio stations in metropolitan markets. The Company’s radio stations carry national and local programming content, as well as national and local advertisers. The Company’s Digital Media segment focuses on Web-based platform designed for audiences interested in Christian and family-themed content and conservative news. The Company’s publishing segment consists of Regnery Publishing, Xulon Press and Salem Publishing. The Company owns and operates approximately 116 radio stations in over 40 markets.

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