Financial Review: Tribune Media (TRCO) versus Sinclair Broadcast Group (SBGI)

Tribune Media (NYSE: TRCO) and Sinclair Broadcast Group (NASDAQ:SBGI) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Dividends

Tribune Media pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Sinclair Broadcast Group pays an annual dividend of $0.72 per share and has a dividend yield of 2.1%. Tribune Media pays out -75.2% of its earnings in the form of a dividend. Sinclair Broadcast Group pays out 27.1% 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. Tribune Media is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

90.8% of Tribune Media shares are owned by institutional investors. Comparatively, 84.8% of Sinclair Broadcast Group shares are owned by institutional investors. 0.6% of Tribune Media shares are owned by company insiders. Comparatively, 28.2% of Sinclair Broadcast Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Tribune Media has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Sinclair Broadcast Group has a beta of 1.92, indicating that its share price is 92% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Tribune Media and Sinclair Broadcast Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tribune Media 1 4 1 0 2.00
Sinclair Broadcast Group 0 0 9 0 3.00

Tribune Media currently has a consensus target price of $43.88, indicating a potential upside of 5.62%. Sinclair Broadcast Group has a consensus target price of $47.00, indicating a potential upside of 35.84%. Given Sinclair Broadcast Group’s stronger consensus rating and higher probable upside, analysts clearly believe Sinclair Broadcast Group is more favorable than Tribune Media.

Earnings and Valuation

This table compares Tribune Media and Sinclair Broadcast Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tribune Media $1.95 billion 1.86 $14.24 million ($1.33) -31.23
Sinclair Broadcast Group $2.74 billion 1.29 $245.30 million $2.66 13.01

Sinclair Broadcast Group has higher revenue and earnings than Tribune Media. Tribune Media is trading at a lower price-to-earnings ratio than Sinclair Broadcast Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Tribune Media and Sinclair Broadcast Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tribune Media -6.12% 4.11% 1.50%
Sinclair Broadcast Group 9.06% 23.27% 3.58%

Summary

Sinclair Broadcast Group beats Tribune Media on 11 of the 16 factors compared between the two stocks.

About Tribune Media

Tribune Media Company, through its subsidiaries, operates as a media and entertainment company in the United States. It offers news, entertainment, and sports programming through Tribune Broadcasting local television stations, including FOX television affiliates, CW Network, LLC television affiliates, CBS television affiliates, ABC television affiliates, NBC television affiliates, and independent television stations; and television series and movies on WGN America, a national general entertainment cable network. The company also operates Antenna TV and THIS TV, a digital multicast networks; Tribune Studios, a development and production studio; Screener, an entertainment Website; and WGN 720 AM, a radio station in Chicago. It owns and operates 42 local television stations. The company was formerly known as Tribune Company and changed its name to Tribune Media Company in July 2014. Tribune Media Company was founded in 1847 and is based in Chicago, Illinois.

About Sinclair Broadcast Group

Sinclair Broadcast Group, Inc. is a television broadcasting company. The Company focuses on providing content on its local television stations and digital platforms. The Company’s segments are broadcast, other and corporate. The Broadcast segment consists of its broadcast television stations. The content distributed through its broadcast platform consists of programming provided by third-party networks and syndicators, local news, it owns networks, and other original programming produced by it. It also owns digital and Internet media products that are complementary to its portfolio of television station related digital properties. It focuses on offering marketing solutions to advertisers. Its other business consists of original networks and content, digital and Internet solutions, technical services and other non-media investments.

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