E.W. Scripps (NASDAQ:SSP) and iHeartMedia (NASDAQ:IHRT) Critical Contrast

iHeartMedia (NASDAQ:IHRT) and E.W. Scripps (NASDAQ:SSP) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Volatility and Risk

iHeartMedia has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500. Comparatively, E.W. Scripps has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Profitability

This table compares iHeartMedia and E.W. Scripps’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
iHeartMedia	-10.37%	-1.63%	0.50%
E.W. Scripps	-4.69%	-0.26%	-0.04%

Earnings and Valuation

This table compares iHeartMedia and E.W. Scripps”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
iHeartMedia	$3.86 billion	0.13	-$1.01 billion	($2.59)	-1.26
E.W. Scripps	$2.32 billion	0.16	$87.60 million	($1.87)	-2.22

E.W. Scripps has lower revenue, but higher earnings than iHeartMedia. E.W. Scripps is trading at a lower price-to-earnings ratio than iHeartMedia, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

93.9% of iHeartMedia shares are held by institutional investors. Comparatively, 67.8% of E.W. Scripps shares are held by institutional investors. 8.5% of iHeartMedia shares are held by company insiders. Comparatively, 3.6% of E.W. Scripps shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for iHeartMedia and E.W. Scripps, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
iHeartMedia	2	2	1	0	1.80
E.W. Scripps	1	1	1	0	2.00

iHeartMedia currently has a consensus target price of $4.33, indicating a potential upside of 32.52%. E.W. Scripps has a consensus target price of $6.95, indicating a potential upside of 67.47%. Given E.W. Scripps’ stronger consensus rating and higher possible upside, analysts clearly believe E.W. Scripps is more favorable than iHeartMedia.

Summary

E.W. Scripps beats iHeartMedia on 7 of the 13 factors compared between the two stocks.

About iHeartMedia

iHeartMedia, Inc. operates as an audio media company in the United States and internationally. It operates through three segments: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group. The Multiplatform Group segment offers broadcast radio stations, sponsorship and events, and live and virtual events; and operates Premiere Networks, a national radio network that produces, distributes, or represents syndicated radio programs and services to radio station affiliates. It also delivers real-time traffic flow and incident information, and weather updates, sports, and news. The Digital Audio Group segment provides podcasting, digital sites, newsletters, digital services, and programs; and iHeartRadio, a mobile app and web based service for radio stations, digital only stations, custom artist stations, and podcasts. The Audio and Media Services Group segment engages in the media representation business; and provides scheduling and broadcast software and services. This segment also provides RCS, a cloud and on-premises broadcast software, such as radio and television automation, music scheduling, newsroom automation, advertising sales management, disaster recovery solutions; and real-time audio recognition technology to radio and television stations, cable channels, record labels, advertisers, and agencies, as well as media streaming and research services. The company was formerly known as CC Media Holdings, Inc. and changed its name to iHeartMedia, Inc. in September 2014. The company is headquartered in San Antonio, Texas.

About E.W. Scripps

The E.W. Scripps Company, together with its subsidiaries, operates as a media enterprise through a portfolio of local television stations, national news, and entertainment networks in the United States. It operates through Local Media, Scripps Networks, and Other segments. The Local Media segment operates broadcast television stations, which produce news, information, sports, and entertainment content, as well as its related digital operations; runs network, syndicated, and original programming, and local sporting events; and provides core and political advertising services. The Scripps Networks segment offers national television networks through free over-the-air broadcast, cable/satellite, connected TV, and digital distribution. This segment also provides Scripp News, a national news network, which provides politics, entertainment, science, and technology news; Court TV, which showcases live trials; entertainment brands, such as Bounce, Defy TV, Grit, ION Mystery, and Laff; and ION, a national network of broadcast stations and broadcast television spectrum, which distributes programming through Federal Communications Commission-licensed television stations, as well as affiliated TV stations through over-the-air broadcast and pay TV platforms. In addition, it provides content and services through digital platforms, including the Internet, smartphones, and tablets; Nuvyyo, which offers consumers DVR product solutions to watch and record free over-the-air HDTV on connected devices; and Scripps National Spelling Bee, which shows educational programs. The company serves audiences and businesses through cable and satellite service providers. The E.W. Scripps Company was founded in 1878 and is headquartered in Cincinnati, Ohio.