Townsquare Media (NYSE:TSQ) vs. Entravision Communications (NYSE:EVC) Critical Comparison

Townsquare Media (NYSE:TSQ) and Entravision Communications (NYSE:EVC) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Volatility and Risk

Townsquare Media has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Entravision Communications has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Profitability

This table compares Townsquare Media and Entravision Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Townsquare Media	-2.58%	-13.74%	0.82%
Entravision Communications	-17.69%	-37.01%	-7.13%

Insider and Institutional Ownership

71.7% of Townsquare Media shares are owned by institutional investors. Comparatively, 69.5% of Entravision Communications shares are owned by institutional investors. 30.5% of Townsquare Media shares are owned by insiders. Comparatively, 8.3% of Entravision Communications shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Townsquare Media and Entravision Communications”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Townsquare Media	$427.38 million	0.20	-$9.75 million	($0.71)	-7.21
Entravision Communications	$447.59 million	0.62	-$79.17 million	($0.88)	-3.44

Townsquare Media has higher earnings, but lower revenue than Entravision Communications. Townsquare Media is trading at a lower price-to-earnings ratio than Entravision Communications, indicating that it is currently the more affordable of the two stocks.

Dividends

Townsquare Media pays an annual dividend of $0.80 per share and has a dividend yield of 15.6%. Entravision Communications pays an annual dividend of $0.20 per share and has a dividend yield of 6.6%. Townsquare Media pays out -112.7% of its earnings in the form of a dividend. Entravision Communications pays out -22.7% 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. Townsquare Media has raised its dividend for 3 consecutive years. Townsquare Media is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations for Townsquare Media and Entravision Communications, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Townsquare Media	1	0	2	0	2.33
Entravision Communications	1	0	0	0	1.00

Townsquare Media currently has a consensus target price of $15.50, suggesting a potential upside of 202.85%. Given Townsquare Media’s stronger consensus rating and higher possible upside, research analysts plainly believe Townsquare Media is more favorable than Entravision Communications.

Summary

Townsquare Media beats Entravision Communications on 13 of the 17 factors compared between the two stocks.

About Townsquare Media

Townsquare Media, Inc. operates as a digital media and marketing solutions company in small and medium-sized businesses. It operates through three segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising. The Subscription Digital Marketing Solutions segment offers website design, creation, and development, as well as hosting services; and search engine optimization, online directory optimization, e-commerce solutions, online reputation monitoring, social media management, appointment scheduling, payment and invoice, customer management, and email and SMS marketing services. The Digital Advertising segment provides digital advertising on its owned and operated, digital programmatic advertising, and data analytics and management platform. The Broadcast Advertising segment engages in the sale of advertising on local radio stations to local, regional, and national spot advertisers, as well as national network advertisers. It also owns and operates live events, including concerts, expositions, and other experiential events; and operates local media under the WYRK.com, WJON.com, and NJ101.5.com brands, as well as national music under the XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com brands. The company was formerly known as Regent Communications, Inc. and changed its name to Townsquare Media, Inc. in May 2010. Townsquare Media, Inc. is headquartered in Purchase, New York.

About Entravision Communications

Entravision Communications Corporation operates as an advertising solutions, media, and technology company worldwide. The company operates through three segments: Digital, Television, and Audio. It reaches and engages Hispanics in the United States. The company's portfolio encompasses integrated end-to-end advertising solutions, including digital, television, and audio properties. It also offers a suite of end-to-end digital advertising solutions, including digital commercial partnerships services; and Smadex, a programmatic ad purchasing platform that enables advertisers to purchase advertising electronically and manage data-driven advertising campaigns through online marketplaces. In addition, the company provides a mobile growth solution, such as managed services to advertisers to reach mobile device users; and digital advertising solutions for advertisers. Further, it owns and operates TelevisaUnivision-affiliated television stations. The company operates various television stations; radio stations; and Spanish-language radio stations. Entravision Communications Corporation was founded in 1996 and is headquartered in Santa Monica, California.