News (NASDAQ:NWSA – Get Free Report) and FOX (NASDAQ:FOXA – Get Free Report) are both large-cap communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.
Valuation & Earnings
This table compares News and FOX”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| News | $9.03 billion | 1.71 | $573.00 million | $1.03 | 27.72 |
| FOX | $17.13 billion | 1.52 | $1.69 billion | $3.83 | 16.21 |
Profitability
This table compares News and FOX’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| News | 6.35% | 7.09% | 4.27% |
| FOX | 9.84% | 20.64% | 10.76% |
Dividends
News pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. FOX pays an annual dividend of $0.58 per share and has a dividend yield of 0.9%. News pays out 19.4% of its earnings in the form of a dividend. FOX pays out 15.1% 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. FOX has raised its dividend for 4 consecutive years. FOX is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
67.0% of News shares are held by institutional investors. Comparatively, 52.5% of FOX shares are held by institutional investors. 11.6% of News shares are held by company insiders. Comparatively, 20.9% of FOX 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.
Volatility & Risk
News has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, FOX has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and target prices for News and FOX, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| News | 0 | 1 | 5 | 0 | 2.83 |
| FOX | 1 | 7 | 11 | 0 | 2.53 |
News presently has a consensus price target of $38.50, suggesting a potential upside of 34.85%. FOX has a consensus price target of $76.35, suggesting a potential upside of 22.99%. Given News’ stronger consensus rating and higher possible upside, analysts clearly believe News is more favorable than FOX.
Summary
FOX beats News on 11 of the 17 factors compared between the two stocks.
About News
News Corporation, a media and information services company, creates and distributes authoritative and engaging content, and other products and services for consumers and businesses worldwide. It operates through six segments: Digital Real Estate Services, Subscription Video Services, Dow Jones, Book Publishing, News Media, and Other. The company distributes content and data products, including The Wall Street Journal, Barron’s, MarketWatch, Investor’s Business Daily, Factiva, Dow Jones Risk & Compliance, Dow Jones Newswires, and Dow Jones Energy through various media channels, such as newspapers, newswires, websites, mobile apps, newsletters, magazines, proprietary databases, live journalism, video, and podcasts. It also owns and operates Monday to Friday, Saturday and Sunday, weekly, and bi-weekly newspapers comprising The Australian, The Weekend Australian, The Daily Telegraph, The Sunday Telegraph, Herald Sun, Sunday Herald Sun, The Courier Mail, The Sunday Mail, The Advertiser, Sunday Mail, The Sun, The Sun on Sunday, The Times, The Sunday Times, and New York Post, as well as digital mastheads and other websites. In addition, the company publishes general fiction, nonfiction, children’s, and religious books; provides sports, entertainment, and news services to pay-TV and streaming subscribers, and other commercial licensees through satellite and internet distribution; and broadcasts rights to live sporting events. Further, it offers property and property-related advertising and services on its websites and mobile applications; digital real estate services; and financial services. News Corporation was founded in 2012 and is headquartered in New York, New York.
About FOX
Fox Corporation operates as a news, sports, and entertainment company in the United States (U.S.). The company operates through four segments: Cable Network Programming, Television, Credible, and The FOX Studio Lot. The Cable Network Programming segment produces and licenses news and sports content for distribution through traditional cable television systems, direct broadcast satellite operators and telecommunication companies, virtual multi-channel video programming distributors, and other digital platforms primarily in the U.S. Television segment produces, acquires, markets, and distributes programming through the FOX broadcast network, advertising supported video-on-demand service Tubi, and operates power broadcast television stations including duopolies and other digital platform; and produces content for third parties. The Credible segment engages in the consumer finance marketplace. The FOX Studio Lot segment provides television and film production services along with office space, studio operation services and includes all operations of the facility. The company was incorporated in 2018 and is headquartered in New York, New York.
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