Nexstar Media Group (NASDAQ: NXST) and Gray Television, Inc. Class A (NYSE:GTN.A) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.
Profitability
Get Nexstar Media Group alerts:This table compares Nexstar Media Group and Gray Television, Inc. Class A’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nexstar Media Group | 20.63% | 15.56% | 2.89% |
| Gray Television, Inc. Class A | 29.97% | 11.01% | 2.77% |
Earnings and Valuation
This table compares Nexstar Media Group and Gray Television, Inc. Class A’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nexstar Media Group | $2.43 billion | 1.37 | $474.99 million | $3.98 | 18.35 |
| Gray Television, Inc. Class A | $882.73 million | 1.44 | $261.95 million | N/A | N/A |
Nexstar Media Group has higher revenue and earnings than Gray Television, Inc. Class A.
Volatility and Risk
Nexstar Media Group has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, Gray Television, Inc. Class A has a beta of 2.74, indicating that its stock price is 174% more volatile than the S&P 500.
Dividends
Nexstar Media Group pays an annual dividend of $1.50 per share and has a dividend yield of 2.1%. Gray Television, Inc. Class A does not pay a dividend. Nexstar Media Group pays out 37.7% of its earnings in the form of a dividend. Nexstar Media Group has raised its dividend for 4 consecutive years.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Nexstar Media Group and Gray Television, Inc. Class A, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nexstar Media Group | 0 | 1 | 10 | 0 | 2.91 |
| Gray Television, Inc. Class A | 0 | 0 | 0 | 0 | N/A |
Nexstar Media Group currently has a consensus price target of $90.00, indicating a potential upside of 23.20%. Given Nexstar Media Group’s higher probable upside, research analysts clearly believe Nexstar Media Group is more favorable than Gray Television, Inc. Class A.
Institutional and Insider Ownership
0.4% of Gray Television, Inc. Class A shares are held by institutional investors. 6.4% of Nexstar Media Group shares are held by insiders. Comparatively, 13.3% of Gray Television, Inc. Class A 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.
Summary
Nexstar Media Group beats Gray Television, Inc. Class A on 9 of the 15 factors compared between the two stocks.
About Nexstar Media Group
Nexstar Media Group, Inc. operates as a television broadcasting and digital media company in the United States. It focuses on the acquisition, development, and operation of television stations and interactive community Websites in medium-sized markets. The company offers free over-the-air programming to television viewing audiences. It also provides sales, programming, and other services through various local service agreements to 36 power television stations owned and/or operated by independent third parties. As of December 31, 2017, the company owned, operated, programmed, or provided sales and other services to 170 television stations in 100 markets in the states of Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, and Wisconsin. The company's stations reach approximately 43.6 million viewers. The company was formerly known as Nexstar Broadcasting Group, Inc. and changed its name to Nexstar Media Group, Inc. in January 2017. Nexstar Media Group, Inc. was founded in 1996 and is headquartered in Irving, Texas.
About Gray Television, Inc. Class A
Gray Television, Inc. is a television broadcast company. The Company owns and operates television stations and digital assets in various markets across the United States. As of February 21, 2017, the Company owned and/or operated television stations in 54 television markets broadcasting over 200 separate programming streams, including 37 affiliates of the CBS Network (CBS), 29 affiliates of the NBC Network (NBC), 20 affiliates of the ABC Network (ABC) and 15 affiliates of the FOX Network (FOX). In addition to a primary broadcast channel, each of its stations can also broadcast additional secondary digital channels within a market by utilizing the same bandwidth, but with different programming from the primary channel. The Company also broadcasts local news/weather channels in certain of its existing markets. Along with affiliations with ABC, CBS and FOX, the Company’s secondary channels are affiliated with various smaller networks and program services.
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