Financial Review: CBS Corporation (CBS) and AMC Networks (AMCX)

AMC Networks (NASDAQ: AMCX) and CBS Corporation (NYSE:CBS) are both mid-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, valuation, earnings, profitabiliy and risk.

Institutional & Insider Ownership

82.0% of AMC Networks shares are held by institutional investors. Comparatively, 76.5% of CBS Corporation shares are held by institutional investors. 17.7% of AMC Networks shares are held by insiders. Comparatively, 1.7% of CBS Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

CBS Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. AMC Networks does not pay a dividend. CBS Corporation pays out 63.7% of its earnings in the form of a dividend. CBS Corporation has raised its dividend for 5 consecutive years.

Profitability

This table compares AMC Networks and CBS Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMC Networks 10.59% 502.40% 8.63%
CBS Corporation 3.96% 41.55% 7.63%

Earnings and Valuation

This table compares AMC Networks and CBS Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AMC Networks $2.77 billion 1.34 $845.29 million $4.14 13.49
CBS Corporation $12.92 billion 1.96 $3.03 billion $1.13 55.07

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

Volatility & Risk

AMC Networks has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, CBS Corporation has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for AMC Networks and CBS Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMC Networks 1 9 7 0 2.35
CBS Corporation 0 6 22 0 2.79

AMC Networks currently has a consensus price target of $60.58, indicating a potential upside of 8.51%. CBS Corporation has a consensus price target of $71.70, indicating a potential upside of 15.22%. Given CBS Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe CBS Corporation is more favorable than AMC Networks.

Summary

CBS Corporation beats AMC Networks on 10 of the 17 factors compared between the two stocks.

About AMC Networks

AMC Networks Inc. is a holding company, which conducts all of its operations through its subsidiaries. The Company owns and operates entertainment businesses and assets. It operates through two segments: National Networks, and International and Other. National Networks includes activities of its programming businesses, which include its programming networks distributed in the United States and Canada. The International and Other segment includes AMC Networks International (AMCNI), the Company’s international programming businesses consisting of a portfolio of channels in Europe, Latin America, the Middle East and parts of Asia and Africa; IFC Films, the Company’s independent film distribution business; AMCNI- DMC, the broadcast solutions unit of certain networks of AMCNI and third-party networks, and various developing online content distribution initiatives. National Networks’ programming networks include AMC, WE tv, BBC AMERICA and SundanceTV.

About CBS Corporation

CBS Corporation is a mass media company. The Company operates through four segment: Entertainment, Cable Networks, Publishing, Local Media. The Entertainment segment comprises the CBS TV Network; CBS TV Studios; CBS Studios International and CBS TV Distribution; CBS Interactive; CBS Films; and the Company’s digital streaming services, CBS All Access and CBSN. The Cable Networks segment comprises Showtime Networks, which operates its subscription program services, Showtime, The Movie Channel, and Flix. The Publishing segment comprises Simon & Schuster, which publishes and distributes consumer books under imprints such as Simon & Schuster, Pocket Books, Scribner and Gallery Books. The Local Media segment comprises CBS TV Stations, it owns 30 broadcast TV stations; and CBS Local Digital Media. Its businesses span the media and entertainment industries, including the CBS TV Network, cable networks and content production and distribution.

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