Nexstar Media Group (NASDAQ:NXST – Get Free Report) and Tencent Music Entertainment Group (NYSE:TME – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.
Dividends
Nexstar Media Group pays an annual dividend of $7.44 per share and has a dividend yield of 3.8%. Tencent Music Entertainment Group pays an annual dividend of $0.17 per share and has a dividend yield of 0.7%. Nexstar Media Group pays out 38.6% of its earnings in the form of a dividend. Tencent Music Entertainment Group pays out 18.7% 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. Nexstar Media Group has increased its dividend for 12 consecutive years. Nexstar Media Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
95.3% of Nexstar Media Group shares are held by institutional investors. Comparatively, 24.3% of Tencent Music Entertainment Group shares are held by institutional investors. 6.7% of Nexstar Media Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nexstar Media Group | $5.32 billion | 1.11 | $722.00 million | $19.26 | 10.08 |
| Tencent Music Entertainment Group | $30.27 billion | 1.31 | $924.18 million | $0.91 | 25.47 |
Tencent Music Entertainment Group has higher revenue and earnings than Nexstar Media Group. Nexstar Media Group is trading at a lower price-to-earnings ratio than Tencent Music Entertainment Group, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent recommendations for Nexstar Media Group and Tencent Music Entertainment Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nexstar Media Group | 0 | 1 | 7 | 0 | 2.88 |
| Tencent Music Entertainment Group | 0 | 2 | 10 | 1 | 2.92 |
Nexstar Media Group currently has a consensus target price of $225.00, indicating a potential upside of 15.88%. Tencent Music Entertainment Group has a consensus target price of $24.54, indicating a potential upside of 5.88%. Given Nexstar Media Group’s higher possible upside, equities research analysts plainly believe Nexstar Media Group is more favorable than Tencent Music Entertainment Group.
Profitability
This table compares Nexstar Media Group and Tencent Music Entertainment Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nexstar Media Group | 11.90% | 28.40% | 5.52% |
| Tencent Music Entertainment Group | 33.72% | 10.75% | 8.39% |
Volatility & Risk
Nexstar Media Group has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Tencent Music Entertainment Group has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.
Summary
Tencent Music Entertainment Group beats Nexstar Media Group on 10 of the 18 factors compared between the two stocks.
About Nexstar Media Group
Nexstar Media Group, Inc. operates as a diversified media company that produces and distributes engaging local and national news, sports and entertainment content across the television and digital platforms in the United States. It owns, operates, programs, or provides sales and other services to various markets; and offers television programming services. The company offers video and display advertising platforms that are delivered locally or nationally through its own and various third party websites, mobile and over-the-top applications, other digital media solutions to media publishers, and advertisers and a consumer product reviews platform. In addition, it owns NewsNation, a national cable news network; and WGN-AM, a Chicago radio station, as well as owns and operates digital multicast networks and other multicast network services. Further, its digital assets include local websites, mobile applications, connected television applications, free-ad supported television channels representing products of local television stations, The CW, The Hill and BestReviews, and a suite of advertising solutions. Additionally, the company engages in digital business; and management of real estate assets, including leasing of owned office and production facilities. Its stations are affiliates of ABC, NBC, FOX, CBS, The CW, MyNetworkTV, and other broadcast television networks. 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.
About Tencent Music Entertainment Group
Tencent Music Entertainment Group operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services in the People's Republic of China. It offers QQ Music, Kugou Music, and Kuwo Music that enable users to discover music in personalized ways; long-form audio content, including audiobooks, podcasts and talk shows, as well as music-oriented video content comprising music videos, live performances, and short videos; and WeSing, which enables users to sing along from its library of karaoke songs and share their performances in audio or video formats with friends. The company also delivers music-centric live streaming services primarily through the Live Streaming tab on QQ Music, Kugou Music, Kuwo Music, WeSing, Kugou Live, and Kuwo Live that provides an interactive online stage for performers and users to showcase their talent and engage with a diverse audience base; and Lazy Audio, an audio platform. In addition, it sells music-related merchandise; and artist-related merchandise, such as branded apparel, posters and art prints, and accessories and integrated and technology-driven music solutions that help IoT device manufacturers build and operate their branded music services on their IoT devices, as well as offers advertising services across its online karaoke platform and online music apps. The company is headquartered in Shenzhen, China. Tencent Music Entertainment Group is a subsidiary of Tencent Holdings Limited.
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