Analyzing Comcast (NASDAQ:CMCSA) and Scholastic (NASDAQ:SCHL)

Scholastic (NASDAQ:SCHL) and Comcast (NASDAQ:CMCSA) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Profitability

This table compares Scholastic and Comcast’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scholastic	3.60%	5.00%	2.22%
Comcast	8.97%	14.77%	5.18%

Dividends

Scholastic pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Comcast pays an annual dividend of $1.32 per share and has a dividend yield of 6.3%. Scholastic pays out 71.4% of its earnings in the form of a dividend. Comcast pays out 42.7% 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. Comcast has increased its dividend for 18 consecutive years. Comcast is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

82.6% of Scholastic shares are held by institutional investors. Comparatively, 84.3% of Comcast shares are held by institutional investors. 12.8% of Scholastic shares are held by insiders. Comparatively, 1.4% of Comcast shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Scholastic and Comcast, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scholastic	0	3	0	0	2.00
Comcast	5	13	11	0	2.21

Scholastic presently has a consensus price target of $35.00, suggesting a potential downside of 10.12%. Comcast has a consensus price target of $30.81, suggesting a potential upside of 46.35%. Given Comcast’s stronger consensus rating and higher probable upside, analysts plainly believe Comcast is more favorable than Scholastic.

Earnings and Valuation

This table compares Scholastic and Comcast”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scholastic	$1.58 billion	0.46	$56.70 million	$1.40	27.81
Comcast	$123.71 billion	0.60	$20.00 billion	$3.09	6.81

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

Volatility and Risk

Scholastic has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Comcast has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Summary

Comcast beats Scholastic on 14 of the 17 factors compared between the two stocks.

About Scholastic

Scholastic Corporation publishes and distributes children’s books worldwide. It operates in three segments: Children’s Book Publishing and Distribution, Education Solutions, and International. The Children’s Book Publishing and Distribution segment engages in publication and distribution of children’s print, digital, and audio books, as well as media and interactive products through its school reading events and trade channel; and operation of school-based book clubs and book fairs in the United States. Its original publications include The Harry Potter, The Hunger Games, The Bad Guys, The Baby-Sitters Club, The Magic School Bus, Captain Underpants, Dog Man, Wings of Fire, Cat Kid Comic Club, and Clifford The Big Red Dog, as well as I Survived, Goosebumps; licensed properties comprising the Peppa Pig and Pokemon; and publishes and creates Klutz and Make Believe Ideas titles, such as Mini Shake Shop, Pokemon Stained Glass, LEGO Miniature Photography, and the Never Touch series. The Education Solutions segment publishes and distributes classroom magazines under the Scholastic News, Scholastic Scope, Storyworks, Let’s Find Out, and Junior Scholastic names; supplemental and classroom materials and programs, and related support services; and print and on-line reference, and non-fiction products, as well as consulting services. The International segment publishes and distributes English, Hindi, and French language children’s books; and operates school-based marketing channels, as well as supply original and licensed children’s books, and supplemental educational materials including professional books for teachers. It distributes its products and services directly to schools and libraries through retail stores and the Internet. The company was founded in 1920 and is headquartered in New York, New York.

About Comcast

Comcast Corporation operates as a media and technology company worldwide. It operates through Residential Connectivity & Platforms, Business Services Connectivity, Media, Studios, and Theme Parks segments. The Residential Connectivity & Platforms segment provides residential broadband and wireless connectivity services, residential and business video services, sky-branded entertainment television networks, and advertising. The Business Services Connectivity segment offers connectivity services for small business locations, which include broadband, wireline voice, and wireless services, as well as solutions for medium-sized customers and larger enterprises; and small business connectivity services in the United Kingdom. The Media segment operates NBCUniversal's television and streaming business, including national and regional cable networks; the NBC and Telemundo broadcast networks and owned local broadcast television stations; and Peacock, a direct-to-consumer streaming services. It also operates international television networks comprising the Sky Sports networks, as well as other digital properties. The Studios segment operates NBCUniversal and Sky film and television studio production and distribution operations. The Theme Parks segment operates Universal theme parks in Orlando, Florida; Hollywood, California; Osaka, Japan; and Beijing, China. The company also offers a consolidated streaming platforms under the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania; and Xumo. Comcast Corporation was founded in 1963 and is headquartered in Philadelphia, Pennsylvania.