Reviewing Gray Television (GTN) & Entravision Communications (EVC)

Entravision Communications (NYSE: EVC) and Gray Television (NYSE:GTN) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Dividends

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Entravision Communications pays an annual dividend of $0.20 per share and has a dividend yield of 4.0%. Gray Television does not pay a dividend. Entravision Communications pays out 11.6% of its earnings in the form of a dividend. Entravision Communications has raised its dividend for 4 consecutive years.

Earnings and Valuation

This table compares Entravision Communications and Gray Television’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Entravision Communications $536.03 million 0.83 $176.29 million $1.73 2.87
Gray Television $882.73 million 1.20 $261.95 million $1.17 10.00

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

Analyst Ratings

This is a summary of current recommendations and price targets for Entravision Communications and Gray Television, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Entravision Communications 0 2 0 0 2.00
Gray Television 0 0 7 0 3.00

Entravision Communications currently has a consensus target price of $7.00, indicating a potential upside of 40.85%. Gray Television has a consensus target price of $19.33, indicating a potential upside of 65.24%. Given Gray Television’s stronger consensus rating and higher possible upside, analysts clearly believe Gray Television is more favorable than Entravision Communications.

Profitability

This table compares Entravision Communications and Gray Television’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Entravision Communications 32.89% 59.55% 24.48%
Gray Television 29.67% 11.91% 2.64%

Risk & Volatility

Entravision Communications has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, Gray Television has a beta of 2.53, indicating that its share price is 153% more volatile than the S&P 500.

Insider and Institutional Ownership

63.8% of Entravision Communications shares are held by institutional investors. Comparatively, 85.4% of Gray Television shares are held by institutional investors. 20.7% of Entravision Communications shares are held by company insiders. Comparatively, 10.0% of Gray Television shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Gray Television beats Entravision Communications on 10 of the 17 factors compared between the two stocks.

About Entravision Communications

Entravision Communications Corporation operates as a media company that reaches and engages Hispanics across media channels and advertising platforms in the United States and certain border markets of Mexico. The company operates through three segments: Television Broadcasting, Radio Broadcasting, and Digital Media. It owns and operates television stations that broadcast drama shows, talk shows, novelas, entertainment magazines, news magazines, national news, specials, late news, children's programs, sports, reality, comedy shows, and movies. The company also owns and operates radio stations that broadcast advertising, news, traffic, weather, promotions, and community events. In addition, it operates a proprietary technology and data platform that delivers digital advertising solutions in various advertising formats. As of December 31, 2016, the company owned and/or operated 54 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas, and Washington, D.C.; and 49 operational radio stations consisting of 38 FM and 11 AM in 18 markets located primarily in Arizona, California, Colorado, Florida, Nevada, New Mexico, and Texas. Entravision Communications Corporation was founded in 1996 and is headquartered in Santa Monica, California.

About Gray Television

Gray Television, Inc., a television broadcast company, owns and operates television stations and digital assets in the United States. As of February 23, 2018, the company owned and operated television stations in 57 television markets broadcasting approximately 200 program streams, including approximately 100 channels affiliated with the CBS Network, the NBC Network, the ABC Network, and the FOX Network. It also broadcasts secondary digital channels affiliated to ABC, CBS, and FOX, as well as channels affiliated with various other networks and program services, including CW Plus Network, MY Network, the MeTV Network, This TV Network, Antenna TV, Telemundo, Cozi, Heroes and Icons, and MOVIES! Network; and local news/weather channels in various markets. The company was formerly known as Gray Communications Systems, Inc. and changed its name to Gray Television, Inc. in August 2002. Gray Television, Inc. was founded in 1897 and is headquartered in Atlanta, Georgia.

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