Contrasting TEGNA (TGNA) and Scripps Networks Interactive (SNI)

TEGNA (NYSE: TGNA) and Scripps Networks Interactive (NASDAQ:SNI) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Valuation & Earnings

This table compares TEGNA and Scripps Networks Interactive’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TEGNA $3.35 billion 0.81 $1.17 billion $1.65 7.62
Scripps Networks Interactive $3.47 billion 3.11 $1.54 billion $4.84 17.20

Scripps Networks Interactive has higher revenue and earnings than TEGNA. TEGNA is trading at a lower price-to-earnings ratio than Scripps Networks Interactive, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TEGNA and Scripps Networks Interactive’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TEGNA 11.90% 20.51% 5.56%
Scripps Networks Interactive 18.20% 29.93% 11.45%

Analyst Ratings

This is a summary of recent recommendations for TEGNA and Scripps Networks Interactive, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TEGNA 1 6 4 0 2.27
Scripps Networks Interactive 1 13 3 0 2.12

TEGNA presently has a consensus price target of $18.44, indicating a potential upside of 46.62%. Scripps Networks Interactive has a consensus price target of $83.77, indicating a potential upside of 0.64%. Given TEGNA’s stronger consensus rating and higher possible upside, equities research analysts plainly believe TEGNA is more favorable than Scripps Networks Interactive.

Institutional & Insider Ownership

97.9% of TEGNA shares are held by institutional investors. Comparatively, 75.8% of Scripps Networks Interactive shares are held by institutional investors. 0.8% of TEGNA shares are held by insiders. Comparatively, 2.5% of Scripps Networks Interactive shares are held 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.

Dividends

TEGNA pays an annual dividend of $0.28 per share and has a dividend yield of 2.2%. Scripps Networks Interactive pays an annual dividend of $1.20 per share and has a dividend yield of 1.4%. TEGNA pays out 17.0% of its earnings in the form of a dividend. Scripps Networks Interactive pays out 24.8% 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. TEGNA is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

TEGNA has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Scripps Networks Interactive has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Summary

Scripps Networks Interactive beats TEGNA on 9 of the 16 factors compared between the two stocks.

TEGNA Company Profile

Tegna Inc. has a portfolio of media and digital businesses that provide content. The Company’s segments include TEGNA Media (Media) and TEGNA Digital (Digital). As of December 31, 2016, its media business included 46 television stations operating in 38 markets and offered television programming and digital content. Its Media segment includes core advertising, including local and national non-political advertising; political advertising during elections; retransmission that represents satellite and cable networks, and telecommunications companies to carry its television signals; digital that includes digital marketing services and advertising on the stations’ Websites, tablet and mobile products, and other services. Its Digital business segment includes G/O Digital and Cofactor.

Scripps Networks Interactive Company Profile

Scripps Networks Interactive, Inc. is a developer of lifestyle-oriented content, providing primarily home, food, travel and other lifestyle-related programing. The Company’s content is distributed through multiple methods, including television, the Internet, digital platforms and licensing arrangements. The Company’s segments include U.S. Networks, International Networks, and Corporate and Other. As of December 31, 2016, the Company’s U.S. Networks segment consisted of six national television networks: HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. The Company’s International Networks includes the TVN S.A. (TVN) portfolio of networks and other lifestyle-oriented networks available in the United Kingdom, other European markets, the Middle East and Africa (EMEA), Asia Pacific (APAC) and Latin America. In addition to the broadcast networks, it also licenses a portion of its programing to other broadcasters around the world.

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