News (NASDAQ:NWS) and Electronic Arts (NASDAQ:EA) are both large-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.
Analyst Recommendations
This is a summary of recent ratings and target prices for News and Electronic Arts, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| News | 0 | 0 | 0 | 0 | N/A |
| Electronic Arts | 0 | 12 | 14 | 0 | 2.54 |
Electronic Arts has a consensus price target of $153.3448, indicating a potential upside of 9.17%. Given Electronic Arts' higher possible upside, analysts plainly believe Electronic Arts is more favorable than News.
Earnings & Valuation
This table compares News and Electronic Arts' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| News | $9.01 billion | 1.62 | $-1,269,000,000.00 | N/A | N/A |
| Electronic Arts | $5.54 billion | 7.30 | $3.04 billion | $4.76 | 29.51 |
Electronic Arts has lower revenue, but higher earnings than News.
Institutional and Insider Ownership
10.7% of News shares are owned by institutional investors. Comparatively, 88.0% of Electronic Arts shares are owned by institutional investors. 39.4% of News shares are owned by company insiders. Comparatively, 0.9% of Electronic Arts shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Dividends
News pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Electronic Arts pays an annual dividend of $0.68 per share and has a dividend yield of 0.5%. Electronic Arts pays out 14.3% of its earnings in the form of a dividend. News has raised its dividend for 1 consecutive years and Electronic Arts has raised its dividend for 1 consecutive years.
Profitability
This table compares News and Electronic Arts' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| News | -11.47% | 1.70% | 1.02% |
| Electronic Arts | 23.51% | 17.85% | 12.11% |
Risk and Volatility
News has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500. Comparatively, Electronic Arts has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.
Summary
Electronic Arts beats News on 9 of the 14 factors compared between the two stocks.
