Comparing New York Times Company (The) (NYT) and News Corporation (NWS)

New York Times Company (The) (NYSE: NYT) and News Corporation (NASDAQ:NWS) are both mid-cap consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

This table compares New York Times Company (The) and News Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New York Times Company (The) 6.02% 13.46% 5.37%
News Corporation -7.96% 2.27% 1.74%

Volatility and Risk

New York Times Company (The) has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, News Corporation has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500.

Insider & Institutional Ownership

64.4% of New York Times Company (The) shares are owned by institutional investors. Comparatively, 9.6% of News Corporation shares are owned by institutional investors. 5.7% of New York Times Company (The) shares are owned by company insiders. Comparatively, 39.4% of News Corporation shares are owned by company 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.

Analyst Ratings

This is a summary of current ratings and recommmendations for New York Times Company (The) and News Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New York Times Company (The) 1 3 0 0 1.75
News Corporation 0 0 1 0 3.00

New York Times Company (The) presently has a consensus target price of $13.93, suggesting a potential downside of 20.15%. Given New York Times Company (The)’s higher possible upside, equities research analysts clearly believe New York Times Company (The) is more favorable than News Corporation.

Dividends

New York Times Company (The) pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. News Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. New York Times Company (The) pays out 26.7% of its earnings in the form of a dividend. News Corporation pays out -17.7% 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. News Corporation has increased its dividend for 3 consecutive years. News Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares New York Times Company (The) and News Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
New York Times Company (The) $1.56 billion 1.82 $29.06 million $0.60 29.08
News Corporation $8.14 billion 1.12 -$738.00 million ($1.13) -13.81

New York Times Company (The) has higher revenue, but lower earnings than News Corporation. News Corporation is trading at a lower price-to-earnings ratio than New York Times Company (The), indicating that it is currently the more affordable of the two stocks.

Summary

News Corporation beats New York Times Company (The) on 9 of the 17 factors compared between the two stocks.

About New York Times Company (The)

The New York Times Company is a media company focused on creating, collecting and distributing news and information. The Company’s principal business consists of distributing content generated by its newsroom through its print, Web and mobile platforms. In addition, it distributes selected content on third-party platforms. The Company includes newspapers, print and digital products and investments. The Company’s businesses include newspapers, such as The New York Times (The Times); Websites, including NYTimes.com; mobile applications, including The Times’s news applications, as well as interest-specific applications, such as NYT Cooking, Crossword and others, and related businesses, such as The Times news services division, product review and recommendation Websites The Wirecutter and The Sweethome, digital archive distribution, NYT Live (its live events business) and other products and services under The Times brand.

About News Corporation

News Corporation is a diversified media and information services company. The Company operates in five segments: News and Information Services, Cable Network Programming, Digital Real Estate Services, Book Publishing, and Other. The Company’s business consists of range of media, including news and information services, sports programming in Australia, digital real estate services, book publishing, and pay-television (TV) distribution in Australia, that are distributed under the brands, including The Wall Street Journal, Dow Jones, Herald Sun, The Sun, The Times, HarperCollins Publishers, FOX SPORTS Australia and realestate.com.au. The Company is a developing provider of digital education content, assessment and delivery services. The Company’s business component includes News and Information Services, Cable Network Programming, Digital Real Estate Services, Book Publishing, Amplify and Foxtel. In July 2014, it completed the acquisition of Harlequin Enterprises from Torstar Corp.

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