Sirius XM (NASDAQ:SIRI – Get Free Report) and News (NASDAQ:NWSA – Get Free Report) are both communication services companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.
Analyst Recommendations
This is a breakdown of recent ratings for Sirius XM and News, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sirius XM | 3 | 5 | 4 | 0 | 2.08 |
| News | 0 | 1 | 5 | 1 | 3.00 |
Sirius XM presently has a consensus target price of $30.82, indicating a potential upside of 4.05%. News has a consensus target price of $37.14, indicating a potential upside of 34.76%. Given News’ stronger consensus rating and higher possible upside, analysts plainly believe News is more favorable than Sirius XM.
Risk & Volatility
Insider and Institutional Ownership
10.7% of Sirius XM shares are held by institutional investors. Comparatively, 67.0% of News shares are held by institutional investors. 3.3% of Sirius XM shares are held by company insiders. Comparatively, 13.6% of News shares are held 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.
Dividends
Sirius XM pays an annual dividend of $1.08 per share and has a dividend yield of 3.6%. News pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. Sirius XM pays out 45.6% of its earnings in the form of a dividend. News pays out 10.0% 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. Sirius XM has raised its dividend for 7 consecutive years. Sirius XM is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Sirius XM and News’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sirius XM | 10.23% | 9.37% | 4.02% |
| News | 12.92% | 6.12% | 3.70% |
Earnings & Valuation
This table compares Sirius XM and News”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sirius XM | $8.56 billion | 1.17 | $805.00 million | $2.37 | 12.50 |
| News | $8.80 billion | 1.71 | $1.18 billion | $2.01 | 13.71 |
News has higher revenue and earnings than Sirius XM. Sirius XM is trading at a lower price-to-earnings ratio than News, indicating that it is currently the more affordable of the two stocks.
Summary
News beats Sirius XM on 12 of the 18 factors compared between the two stocks.
About Sirius XM
Sirius XM Holdings Inc. operates as an audio entertainment company in North America. It operates in two segments, Sirius XM, and Pandora and Off-platform. The company’s Sirius XM segment provides music, sports, entertainment, comedy, talk, news, traffic and weather channels, and other content, as well as podcast and infotainment services on subscription fee basis; and live, curated, and exclusive and on demand programming services through satellite radio systems and streamed through applications for mobile and home devices, and other consumer electronic equipment. This segment also distributes satellite radios through automakers and retailers, as well as its website; podcasts, including true crime, news, politics, music, comedy, sports, and entertainment; and offers location-based services through two-way wireless connectivity, including safety, security, convenience, maintenance and data, remote vehicles diagnostic, and stolen or parked vehicle locator services. In addition, this segment provides music channels on the DISH Network satellite television service as a programming package; Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedule and scores, and movie listings; graphic information related to road closings, traffic flow, and incident data for consumers with in-vehicle navigation systems; real-time weather services in vehicles, boats, and planes; and music programming and commercial-free music services for office, restaurants, and other business. Its Pandora and Off-platform segment operates music, comedy, and podcast streaming platform, which offers personalized experience for listener through computers, tablets, mobile devices, vehicle speakers, and connected devices; and provides advertising services. The company was incorporated in 2013 and is headquartered in New York.
About News
News Corporation, a media and information services company, creates and distributes authoritative and engaging content, and other products and services for consumers and businesses worldwide. It operates through six segments: Digital Real Estate Services, Subscription Video Services, Dow Jones, Book Publishing, News Media, and Other. The company distributes content and data products, including The Wall Street Journal, Barron’s, MarketWatch, Investor’s Business Daily, Factiva, Dow Jones Risk & Compliance, Dow Jones Newswires, and Dow Jones Energy through various media channels, such as newspapers, newswires, websites, mobile apps, newsletters, magazines, proprietary databases, live journalism, video, and podcasts. It also owns and operates Monday to Friday, Saturday and Sunday, weekly, and bi-weekly newspapers comprising The Australian, The Weekend Australian, The Daily Telegraph, The Sunday Telegraph, Herald Sun, Sunday Herald Sun, The Courier Mail, The Sunday Mail, The Advertiser, Sunday Mail, The Sun, The Sun on Sunday, The Times, The Sunday Times, and New York Post, as well as digital mastheads and other websites. In addition, the company publishes general fiction, nonfiction, children’s, and religious books; provides sports, entertainment, and news services to pay-TV and streaming subscribers, and other commercial licensees through satellite and internet distribution; and broadcasts rights to live sporting events. Further, it offers property and property-related advertising and services on its websites and mobile applications; digital real estate services; and financial services. News Corporation was founded in 2012 and is headquartered in New York, New York.
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