Comparing Time Warner (TWX) and Its Competitors

Time Warner (NYSE: TWX) is one of 32 public companies in the “Cable & other pay television services” industry, but how does it compare to its peers? We will compare Time Warner to similar businesses based on the strength of its dividends, analyst recommendations, valuation, institutional ownership, earnings, risk and profitability.

Analyst Ratings

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This is a summary of current ratings and recommmendations for Time Warner and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Time Warner 0 13 8 0 2.38
Time Warner Competitors 290 1471 2269 74 2.52

Time Warner currently has a consensus price target of $104.33, indicating a potential upside of 9.23%. As a group, “Cable & other pay television services” companies have a potential upside of 24.65%. Given Time Warner’s peers stronger consensus rating and higher probable upside, analysts clearly believe Time Warner has less favorable growth aspects than its peers.

Risk & Volatility

Time Warner has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Time Warner’s peers have a beta of 1.23, indicating that their average share price is 23% more volatile than the S&P 500.

Institutional & Insider Ownership

80.8% of Time Warner shares are owned by institutional investors. Comparatively, 56.1% of shares of all “Cable & other pay television services” companies are owned by institutional investors. 0.2% of Time Warner shares are owned by company insiders. Comparatively, 11.6% of shares of all “Cable & other pay television services” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Time Warner pays an annual dividend of $1.61 per share and has a dividend yield of 1.7%. Time Warner pays out 25.1% of its earnings in the form of a dividend. As a group, “Cable & other pay television services” companies pay a dividend yield of 1.5% and pay out 34.3% of their earnings in the form of a dividend. Time Warner is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Profitability

This table compares Time Warner and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Time Warner 16.78% 18.96% 7.54%
Time Warner Competitors 1,299.83% 26.80% 3.67%

Earnings & Valuation

This table compares Time Warner and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Time Warner $31.27 billion $5.25 billion 14.88
Time Warner Competitors $12.88 billion $1.94 billion 53.67

Time Warner has higher revenue and earnings than its peers. Time Warner is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Time Warner peers beat Time Warner on 9 of the 15 factors compared.

About Time Warner

Time Warner Inc. is a media and entertainment company. The Company operates through three segments: Turner, which consists of cable networks and digital media properties; Home Box Office, which consists of premium pay television and over the top (OTT) services and premium pay, basic tier television and OTT services internationally, and Warner Bros., which consists of television, feature film, home video, and videogame production and distribution. It also holds interests in companies that operate broadcast networks. The Company holds interest in Central European Media Enterprises Ltd. (CME), which is a broadcasting company that operates television networks in Bulgaria, Croatia, the Czech Republic, Romania, the Slovak Republic and Slovenia and The CW broadcast network (The CW), which includes a lineup of advertising-supported original programming, such as The 100, Arrow, Crazy Ex-Girlfriend, DC’s Legends of Tomorrow, The Flash, Frequency, iZombie, Jane the Virgin and No Tomorrow.

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