Sinclair Broadcast Group (NASDAQ: SBGI) and Nexstar Media Group (NASDAQ:NXST) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Valuation & Earnings

This table compares Sinclair Broadcast Group and Nexstar Media Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sinclair Broadcast Group $2.73 billion 1.05 $576.01 million $2.80 10.07
Nexstar Media Group $2.43 billion 1.19 $474.99 million $3.98 15.77

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

Risk & Volatility

Sinclair Broadcast Group has a beta of 1.64, indicating that its share price is 64% more volatile than the S&P 500. Comparatively, Nexstar Media Group has a beta of 1.77, indicating that its share price is 77% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Sinclair Broadcast Group and Nexstar Media Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sinclair Broadcast Group 0 0 9 0 3.00
Nexstar Media Group 0 0 9 0 3.00

Sinclair Broadcast Group currently has a consensus target price of $48.44, indicating a potential upside of 71.79%. Nexstar Media Group has a consensus target price of $88.38, indicating a potential upside of 40.84%. Given Sinclair Broadcast Group’s higher probable upside, research analysts clearly believe Sinclair Broadcast Group is more favorable than Nexstar Media Group.

Institutional and Insider Ownership

87.2% of Sinclair Broadcast Group shares are owned by institutional investors. 28.2% of Sinclair Broadcast Group shares are owned by company insiders. Comparatively, 7.8% of Nexstar Media Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Sinclair Broadcast Group and Nexstar Media Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sinclair Broadcast Group 21.07% 22.76% 4.25%
Nexstar Media Group 19.53% 14.44% 2.51%

Dividends

Sinclair Broadcast Group pays an annual dividend of $0.72 per share and has a dividend yield of 2.6%. Nexstar Media Group pays an annual dividend of $1.50 per share and has a dividend yield of 2.4%. Sinclair Broadcast Group pays out 25.7% of its earnings in the form of a dividend. Nexstar Media Group pays out 37.7% 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. Sinclair Broadcast Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Sinclair Broadcast Group beats Nexstar Media Group on 10 of the 14 factors compared between the two stocks.

Sinclair Broadcast Group Company Profile

Sinclair Broadcast Group, Inc. operates as a television broadcasting company in the United States. It owns or provides various programming, operating, or sales services to television stations. The company broadcasts free over-the-air programming, such as network provided programs, locally-produced news, local sporting events, programming from program service arrangements, syndicated entertainment programs, and internally originated programming to television viewing audiences in the communities through its local television stations. As of December 31, 2017, it owned, operated, and/or provided services to 191 stations in 89 markets, which broadcast 601 channels. The company also owns and operates various networks carried on distribution platforms; and Tennis Channel, a cable network that includes coverage of various tennis' top tournaments and original professional sport, and tennis lifestyle shows. In addition, it offers digital agency services; and broadcast related technical services to the broadcast industry, as well as designs and manufactures broadcast systems, including transmitters and antennas. In addition, it provides sign design and fabrication services; and invests in various real estate ventures, including developmental land, and operating commercial and multi-family residential real estate properties and apartments, as well as private equity and structured debt/mezzanine financing investment funds. The company was founded in 1986 and is headquartered in Hunt Valley, Maryland.

Nexstar Media Group Company Profile

Nexstar Media Group, Inc. operates as a television broadcasting and digital media company in the United States. It focuses on the acquisition, development, and operation of television stations and interactive community Websites in medium-sized markets. The company offers free over-the-air programming to television viewing audiences. It also provides sales, programming, and other services through various local service agreements to 36 power television stations owned and/or operated by independent third parties. As of December 31, 2017, the company owned, operated, programmed, or provided sales and other services to 170 television stations in 100 markets in the states of Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, and Wisconsin. The company's stations reach approximately 43.6 million viewers. The company was formerly known as Nexstar Broadcasting Group, Inc. and changed its name to Nexstar Media Group, Inc. in January 2017. Nexstar Media Group, Inc. was founded in 1996 and is headquartered in Irving, Texas.

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