Twenty-First Century Fox (NASDAQ: FOXA) and DTS (NASDAQ:DTSI) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.

Profitability

This table compares Twenty-First Century Fox and DTS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Twenty-First Century Fox 10.36% 22.46% 7.19%
DTS 1.17% 1.04% 0.59%

Dividends

Twenty-First Century Fox pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. DTS pays an annual dividend of $0.08 per share and has a dividend yield of 0.2%. Twenty-First Century Fox pays out 22.6% of its earnings in the form of a dividend. DTS pays out -19.0% 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.

Risk & Volatility

Twenty-First Century Fox has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, DTS has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Twenty-First Century Fox and DTS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Twenty-First Century Fox 0 5 16 0 2.76
DTS 0 1 0 0 2.00

Twenty-First Century Fox presently has a consensus price target of $33.42, indicating a potential upside of 26.64%. DTS has a consensus price target of $42.50, indicating a potential upside of 0.09%. Given Twenty-First Century Fox’s stronger consensus rating and higher possible upside, equities analysts clearly believe Twenty-First Century Fox is more favorable than DTS.

Earnings and Valuation

This table compares Twenty-First Century Fox and DTS’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Twenty-First Century Fox $28.50 billion 1.71 $7.11 billion $1.59 16.60
DTS N/A N/A N/A ($0.42) -101.09

Twenty-First Century Fox has higher revenue and earnings than DTS. DTS is trading at a lower price-to-earnings ratio than Twenty-First Century Fox, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

53.6% of Twenty-First Century Fox shares are held by institutional investors. Comparatively, 98.1% of DTS shares are held by institutional investors. 20.3% of Twenty-First Century Fox shares are held by insiders. Comparatively, 11.3% of DTS shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Twenty-First Century Fox beats DTS on 11 of the 13 factors compared between the two stocks.

About Twenty-First Century Fox

Twenty-First Century Fox, Inc. is a media and entertainment company. The Company’s segments include Cable Network Programming; Television; Filmed Entertainment, and Other, Corporate and Eliminations. The Cable Network Programming segment produces and licenses news, business news, sports, general entertainment, factual entertainment and movie programming for distribution. The Television segment is engaged in the operation of broadcast television stations and the broadcasting of network programming in the United States. The Filmed Entertainment segment is engaged in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media, and the production and licensing of television programming around the world. The Other, Corporate and Eliminations segment consists primarily of corporate overhead and eliminations, and other businesses.

About DTS

DTS, Inc. is an audio technology solutions provider for high-definition entertainment experiences. The Company’s audio solutions are designed to enable recording, delivery and playback of high-definition audio, and are included by licensee customers around the world into a range of consumer electronics devices, including televisions, personal computers (PCs), smartphones, tablets, digital media players (DMPs), set-top-boxes, soundbars, wireless speakers, video game consoles, Blu-ray Disc players, automotive audio systems, audio/video receivers (AVRs), digital versatile disc (DVD)-based products and home theater systems. In the wireless speakers market, the Company maintains a Play-Fi Certified original design manufacturer (ODM) Program. The Company’s market base includes Blu-ray, Home audio video (AV) and Automotive. The Blu-ray market includes standalone players, gaming devices and disc drives included in PCs.

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