Critical Analysis: CBS (CBS) versus Liberty Media (FWONA)

CBS (NYSE: CBS) and Liberty Media (NASDAQ:FWONA) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Insider & Institutional Ownership

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77.9% of CBS shares are owned by institutional investors. Comparatively, 10.1% of Liberty Media shares are owned by institutional investors. 1.8% of CBS shares are owned by insiders. Comparatively, 5.3% of Liberty Media shares are owned 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.

Volatility and Risk

CBS has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Liberty Media has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Dividends

CBS pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. Liberty Media does not pay a dividend. CBS pays out 17.2% of its earnings in the form of a dividend. CBS has increased its dividend for 6 consecutive years.

Analyst Ratings

This is a summary of recent ratings and recommmendations for CBS and Liberty Media, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBS 0 7 15 0 2.68
Liberty Media 0 3 6 0 2.67

CBS currently has a consensus price target of $69.19, suggesting a potential upside of 40.26%. Liberty Media has a consensus price target of $41.57, suggesting a potential upside of 42.81%. Given Liberty Media’s higher possible upside, analysts plainly believe Liberty Media is more favorable than CBS.

Valuation & Earnings

This table compares CBS and Liberty Media’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CBS $13.69 billion 1.38 $357.00 million $4.19 11.77
Liberty Media $1.78 billion 3.77 $1.35 billion $1.21 24.06

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

Profitability

This table compares CBS and Liberty Media’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBS 2.61% 67.23% 7.80%
Liberty Media 14.30% 1.19% 0.61%

Summary

CBS beats Liberty Media on 10 of the 17 factors compared between the two stocks.

CBS Company Profile

CBS Corporation operates as a mass media company worldwide. The company operates through four segments: Entertainment, Cable Networks, Publishing, and Local Media. The Entertainment segment distributes a schedule of news and public affairs broadcasts, and sports and entertainment programming; produces, acquires, and/or distributes programming, including series, specials, news, and public affairs; operates online content networks for information and entertainment; produces, acquires, and distributes theatrical motion pictures; and digital streaming services. The Cable Networks segment offers subscription program services, such as original series, theatrical feature films, documentaries, boxing and other sports-related programming, and special events. This segment also operates CBS Sports Network, a 24-hour cable program service that provides college sports and related content; and Smithsonian Networks, which operates a channel featuring cultural, historical, scientific, and educational programs. The Publishing segment publishes and distributes adult and children's consumer books in printed, digital, and audio formats; develops special imprints and publishes titles based on the products of the company, as well as that of third parties; and distributes products for other publishers. This segment also delivers content; and promotes its products on its Websites, social media, and general Internet sites, as well as those related to individual titles. The Local Media segment owns 29 broadcast television stations; and operates local Websites, including content from the company's television stations. The company was founded in 1986 and is headquartered in New York, New York.

Liberty Media Company Profile

Formula One Group, through its subsidiaries, engages in the media and entertainment businesses in North America. Formula One Group was formerly known as The Liberty Media Group. The company is based in Englewood, Colorado. Formula One Group is a former subsidiary of Liberty Media Corporation.

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