FOX (NASDAQ:FOXA) versus Warner Bros. Discovery (NASDAQ:WBD) Critical Comparison

Warner Bros. Discovery (NASDAQ:WBD) and FOX (NASDAQ:FOXA) are both large-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Volatility & Risk

Warner Bros. Discovery has a beta of 1.64, indicating that its share price is 64% more volatile than the S&P 500. Comparatively, FOX has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Valuation & Earnings

This table compares Warner Bros. Discovery and FOX”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Warner Bros. Discovery	$39.32 billion	1.71	-$11.31 billion	$0.19	143.21
FOX	$16.30 billion	1.71	$2.26 billion	$4.16	15.11

FOX has lower revenue, but higher earnings than Warner Bros. Discovery. FOX is trading at a lower price-to-earnings ratio than Warner Bros. Discovery, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

60.0% of Warner Bros. Discovery shares are owned by institutional investors. Comparatively, 52.5% of FOX shares are owned by institutional investors. 1.8% of Warner Bros. Discovery shares are owned by insiders. Comparatively, 19.7% of FOX shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Warner Bros. Discovery and FOX, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Warner Bros. Discovery	1	11	11	1	2.50
FOX	0	8	8	0	2.50

Warner Bros. Discovery presently has a consensus target price of $24.94, indicating a potential downside of 8.35%. FOX has a consensus target price of $75.07, indicating a potential upside of 19.44%. Given FOX’s higher probable upside, analysts clearly believe FOX is more favorable than Warner Bros. Discovery.

Profitability

This table compares Warner Bros. Discovery and FOX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Warner Bros. Discovery	1.28%	1.34%	0.47%
FOX	11.41%	18.14%	9.40%

About Warner Bros. Discovery

Warner Bros. Discovery, Inc. operates as a media and entertainment company worldwide. It operates through three segments: Studios, Network, and DTC. The Studios segment produces and releases feature films for initial exhibition in theaters; produces and licenses television programs to its networks and third parties and direct-to-consumer services; distributes films and television programs to various third parties and internal television; and offers streaming services and distribution through the home entertainment market, themed experience licensing, and interactive gaming. The Network segment comprises domestic and international television networks. The DTC segment offers premium pay-tv and streaming services. In addition, the company offers portfolio of content, brands, and franchises across television, film, streaming, and gaming under the Warner Bros. Motion Picture Group, Warner Bros. Television Group, DC, HBO, HBO Max, Max, Discovery Channel, discovery+, CNN, HGTV, Food Network, TNT Sports, TBS, TLC, OWN, Warner Bros. Games, Batman, Superman, Wonder Woman, Harry Potter, Looney Tunes, Hanna-Barbera, Game of Thrones, and The Lord of the Rings brands. Further, it provides content through distribution platforms, including linear network, free-to-air, and broadcast television; authenticated GO applications, digital distribution arrangements, content licensing arrangements, and direct-to-consumer subscription products. Warner Bros. Discovery, Inc. was incorporated in 2008 and is headquartered in New York, New York.

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.