CBS (CBS) and Belo (BLC) Critical Review

CBS (NYSE: CBS) and Belo (NYSE:BLC) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for CBS and Belo, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBS 0 5 22 0 2.81
Belo 0 0 0 0 N/A

CBS currently has a consensus price target of $72.04, suggesting a potential upside of 24.68%.

Profitability

This table compares CBS and Belo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBS 2.14% 58.49% 7.60%
Belo N/A N/A N/A

Dividends

CBS pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Belo does not pay a dividend. CBS pays out 20.9% of its earnings in the form of a dividend. CBS has raised its dividend for 6 consecutive years.

Volatility & Risk

CBS has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500. Comparatively, Belo has a beta of 3.11, indicating that its share price is 211% more volatile than the S&P 500.

Insider and Institutional Ownership

74.8% of CBS shares are held by institutional investors. 2.0% of CBS shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares CBS and Belo’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CBS $13.17 billion 1.76 $1.26 billion $3.44 16.80
Belo N/A N/A N/A $0.88 N/A

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

Summary

CBS beats Belo on 10 of the 12 factors compared between the two stocks.

About CBS

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.

About Belo

Belo Corp. (Belo) is a television company. The Company owns 20 television stations, including ABC, CBS, NBC, FOX, CW and MyNetwork TV (MNTV) affiliates, and their associated websites, in 15 markets across the United States. The Company also has three local and two regional news channels. Belo also has a services agreement with the owner and operator of KFWD-TV, licensed to Fort Worth, Texas. Six of the Company’s stations are located in four metropolitan areas in the United States: ABC affiliate WFAA-TV in Dallas/Fort Worth; CBS affiliate KHOU-TV in Houston; NBC affiliate KING-TV and independent KONG-TV in Seattle/Tacoma, and Independent KTVK and The CW Network (CW) affiliate KASW-TV in Phoenix. Belo’s television stations have been recognized with numerous local, state and national awards for news coverage and community service. In December 2013, Gannett Co Inc announced that it has completed the acquisition of Belo Corp.

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