Head to Head Analysis: Directv (NASDAQ:DTV) vs. CBS (CBS)

Directv (NASDAQ: DTV) and CBS (NYSE:CBS) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
Directv 8.96% N/A 11.77%
CBS 2.14% 58.49% 7.60%

Dividends

CBS pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Directv does not pay a dividend. CBS pays out 20.9% of its earnings in the form of a dividend. CBS has raised its dividend for 6 consecutive years.

Insider and Institutional Ownership

75.3% of CBS shares are held by institutional investors. 2.0% of CBS shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Directv and CBS’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Directv N/A N/A N/A $5.76 N/A
CBS $13.17 billion 1.62 $1.26 billion $3.44 15.45

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Directv and CBS, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Directv 0 0 0 0 N/A
CBS 0 7 18 0 2.72

CBS has a consensus target price of $70.91, suggesting a potential upside of 33.40%.

Summary

CBS beats Directv on 8 of the 12 factors compared between the two stocks.

About Directv

DIRECTV is a provider of digital television entertainment in the United States and Latin America. The Company operates two direct-to-home (DTH) business units: DIRECTV U.S. and DIRECTV Latin America, which are engaged in acquiring, promoting, selling and distributing digital entertainment programming primarily through satellite to residential and commercial subscribers. In addition, the Company owns and operates two regional sports networks, and also owns non-controlling interests in two others, ROOT SPORTS Northwest and ROOT SPORTS Houston. The Company’s reportable segments include DIRECTV U.S., Sky Brasil and PanAmericana, which are engaged in acquiring, promoting, selling and distributing digital entertainment programming, and the Sports Networks, Eliminations and Other segment, which includes its regional sports networks that provide programming to local professional sports teams and college sporting events and locally produce their own programming.

About CBS

CBS Corporation is a mass media company. The Company operates through four segment: Entertainment, Cable Networks, Publishing, Local Media. The Entertainment segment comprises the CBS TV Network; CBS TV Studios; CBS Studios International and CBS TV Distribution; CBS Interactive; CBS Films; and the Company’s digital streaming services, CBS All Access and CBSN. The Cable Networks segment comprises Showtime Networks, which operates its subscription program services, Showtime, The Movie Channel, and Flix. The Publishing segment comprises Simon & Schuster, which publishes and distributes consumer books under imprints such as Simon & Schuster, Pocket Books, Scribner and Gallery Books. The Local Media segment comprises CBS TV Stations, it owns 30 broadcast TV stations; and CBS Local Digital Media. Its businesses span the media and entertainment industries, including the CBS TV Network, cable networks and content production and distribution.

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