Contrasting Saga Communications (NASDAQ:SGA) & Sinclair (NASDAQ:SBGI)

Saga Communications (NASDAQ:SGA) and Sinclair (NASDAQ:SBGI) are both small-cap communication services companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Institutional and Insider Ownership

74.3% of Saga Communications shares are held by institutional investors. Comparatively, 41.7% of Sinclair shares are held by institutional investors. 23.2% of Saga Communications shares are held by insiders. Comparatively, 42.1% of Sinclair shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Saga Communications and Sinclair’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saga Communications	-8.55%	3.87%	2.90%
Sinclair	1.60%	-16.09%	-0.95%

Dividends

Saga Communications pays an annual dividend of $1.00 per share and has a dividend yield of 13.0%. Sinclair pays an annual dividend of $1.00 per share and has a dividend yield of 7.4%. Saga Communications pays out -72.5% of its earnings in the form of a dividend. Sinclair pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Saga Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Saga Communications and Sinclair”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saga Communications	$107.11 million	0.46	-$7.90 million	($1.38)	-5.57
Sinclair	$3.17 billion	0.31	-$112.00 million	$0.75	17.96

Saga Communications has higher earnings, but lower revenue than Sinclair. Saga Communications is trading at a lower price-to-earnings ratio than Sinclair, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Saga Communications and Sinclair, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saga Communications	1	2	0	0	1.67
Sinclair	2	2	2	0	2.00

Sinclair has a consensus target price of $19.40, indicating a potential upside of 44.02%. Given Sinclair’s stronger consensus rating and higher probable upside, analysts plainly believe Sinclair is more favorable than Saga Communications.

Volatility & Risk

Saga Communications has a beta of -0.12, meaning that its share price is 112% less volatile than the S&P 500. Comparatively, Sinclair has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Summary

Sinclair beats Saga Communications on 9 of the 16 factors compared between the two stocks.

About Saga Communications

Saga Communications, Inc., a media company, engages in acquiring, developing, and operating broadcast properties in the United States. The company's radio stations employ various programming formats, including classic hits, country, classic country, hot/soft/urban adult contemporary, oldies, classic rock, rock, and news/talk. It owns and operates FM and AM radio stations, and metro signals serving various markets. Saga Communications, Inc. was incorporated in 1986 and is headquartered in Grosse Pointe Farms, Michigan.

About Sinclair

Sinclair, Inc., a media company, provides content on local television stations and digital platforms in the United States. It operates through two segments, Local Media and Tennis. The Local Media segment operates broadcast television stations, original networks, and content; provides free-over-the-air programming and live local sporting events on its stations; distributes its content to multi-channel video programming distributors in exchange for contractual fees; and produces local and original news programs. This segment operates The Nest, a free over-the-air national broadcast TV network; Comet, a science fiction network; CHARGE!, an adventure and action-based network; and TBD, a multiscreen TV network. The Tennis segment offers Tennis Channel, a cable network which includes coverage of tennis' top tournaments and original professional sports, and tennis lifestyle shows; Tennis Channel International streaming service; Tennis Channel Plus streaming service; T2 FAST, a 24-hours a day free ad-supported streaming television channel; and Tennis.com and Pickleballtv. It also provides digital and internet solutions; and technical services, including the design and manufacture of broadcast systems. The company distributes its content through broadcast platforms and third-party platforms that consist of programming provided by third-party networks and syndicators, local news, and other original programming. Sinclair, Inc. was founded in 1971 and is headquartered in Hunt Valley, Maryland.