Sirius XM (NASDAQ: SIRI) and Entercom Communications (NYSE:ETM) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.
Sirius XM pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. Entercom Communications pays an annual dividend of $0.36 per share and has a dividend yield of 3.7%. Sirius XM pays out 20.0% of its earnings in the form of a dividend. Entercom Communications pays out -80.0% 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. Entercom Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Sirius XM and Entercom Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and recommmendations for Sirius XM and Entercom Communications, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sirius XM presently has a consensus price target of $6.15, indicating a potential downside of 1.50%. Given Sirius XM’s higher probable upside, analysts plainly believe Sirius XM is more favorable than Entercom Communications.
Institutional & Insider Ownership
20.0% of Sirius XM shares are held by institutional investors. Comparatively, 84.7% of Entercom Communications shares are held by institutional investors. 1.1% of Sirius XM shares are held by insiders. Comparatively, 32.6% of Entercom Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Sirius XM and Entercom Communications’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sirius XM||$5.43 billion||5.17||$647.90 million||$0.20||31.20|
|Entercom Communications||$592.88 million||2.20||$233.84 million||($0.45)||-21.44|
Sirius XM has higher revenue and earnings than Entercom Communications. Entercom Communications is trading at a lower price-to-earnings ratio than Sirius XM, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Sirius XM has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Entercom Communications has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.
Sirius XM beats Entercom Communications on 9 of the 16 factors compared between the two stocks.
Sirius XM Company Profile
Sirius XM Radio Inc. broadcasts its music, sports, entertainment, comedy, talk, news, traffic and weather channels in the United States on a subscription fee basis through its two satellite radio systems. Subscribers can also receive certain of its music and other channels over the Internet, including through applications for mobile devices. As of December 31, 2011, it had 21,892,824 subscribers. Its subscribers include subscribers under its regular and discounted pricing plans; subscribers that have prepaid, including payments made or due from automakers for subscriptions included in the sale or lease price of a vehicle; radios activated for daily rental fleet programs, and subscribers to its Internet services who do not also have satellite radio subscriptions. In January 2013, Liberty Media Corporation announced it held 50.7% interest of the Company.
Entercom Communications Company Profile
Entercom Communications Corp. is a radio broadcasting company. The Company sells advertising time to local, regional and national advertisers and national network advertisers, purchasing spot commercials in varying lengths. It focuses on station-related digital platforms, which allow for audience interaction and participation, and integrated local digital marketing solutions and station events. Its stations are classified by their format, such as news, sports, talk, classic rock, urban, adult contemporary, alternative and country, among others. As of December 31, 2016, it had a portfolio of radio stations in 28 markets across the United States. It operates in various markets, which include Boston, Buffalo, Denver, Kansas City, Miami, Sacramento, San Francisco and Seattle. Its radio stations include KSWD Frequency Modulation (FM), KOSI FM, KYGO FM, KEPN AM, KKFN FM, KQKS FM, KRWZ Amplitude Modulation (AM), WSTR FM, WAXY AM/FM, WLYF FM, WMXJ FM, KBZT FM, KSON FM/KSOQ FM and KIFM FM.
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