Head to Head Analysis: Saga Communications (NASDAQ:SGA) versus FOX (NASDAQ:FOX)

Saga Communications (NASDAQ:SGA) and FOX (NASDAQ:FOX) are both communication services companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Dividends

Saga Communications pays an annual dividend of $1.00 per share and has a dividend yield of 12.8%. FOX pays an annual dividend of $0.58 per share and has a dividend yield of 1.0%. Saga Communications pays out -72.5% of its earnings in the form of a dividend. FOX pays out 12.3% 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. FOX has increased its dividend for 4 consecutive years. Saga Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

74.3% of Saga Communications shares are held by institutional investors. Comparatively, 26.4% of FOX shares are held by institutional investors. 23.2% of Saga Communications shares are held by company insiders. Comparatively, 23.1% of FOX shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Saga Communications and FOX”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saga Communications	$107.11 million	0.46	-$7.90 million	($1.38)	-5.67
FOX	$17.13 billion	1.47	$1.69 billion	$4.71	12.67

FOX has higher revenue and earnings than Saga Communications. Saga Communications is trading at a lower price-to-earnings ratio than FOX, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Saga Communications and FOX, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saga Communications	1	2	0	0	1.67
FOX	1	0	6	3	3.10

FOX has a consensus price target of $79.50, indicating a potential upside of 33.20%. Given FOX’s stronger consensus rating and higher probable upside, analysts plainly believe FOX is more favorable than Saga Communications.

Profitability

This table compares Saga Communications and FOX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saga Communications	-8.55%	3.87%	2.90%
FOX	11.30%	23.96%	12.52%

Risk & Volatility

Saga Communications has a beta of -0.12, indicating that its share price is 112% less volatile than the S&P 500. Comparatively, FOX has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Summary

FOX beats Saga Communications on 14 of the 18 factors compared between the two stocks.

About Saga Communications

Saga Communications, Inc., a media company, engages in acquiring, developing, and operating broadcast properties in the United States. The company's radio stations employ various programming formats, including classic hits, country, classic country, hot/soft/urban adult contemporary, oldies, classic rock, rock, and news/talk. It owns and operates FM and AM radio stations, and metro signals serving various markets. Saga Communications, Inc. was incorporated in 1986 and is headquartered in Grosse Pointe Farms, Michigan.

About FOX

Fox Corporation operates as a news, sports, and entertainment company in the United States (U.S.). The company operates through four segments: Cable Network Programming, Television, Credible, and The FOX Studio Lot. The Cable Network Programming segment produces and licenses news and sports content for distribution through traditional cable television systems, direct broadcast satellite operators and telecommunication companies, virtual multi-channel video programming distributors, and other digital platforms primarily in the U.S. Television segment produces, acquires, markets, and distributes programming through the FOX broadcast network, advertising supported video-on-demand service Tubi, and operates power broadcast television stations including duopolies and other digital platform; and produces content for third parties. The Credible segment engages in the consumer finance marketplace. The FOX Studio Lot segment provides television and film production services along with office space, studio operation services and includes all operations of the facility. The company was incorporated in 2018 and is headquartered in New York, New York.