Critical Analysis: Scripps Networks Interactive (SNI) & AMC Networks (AMCX)

Scripps Networks Interactive (NASDAQ: SNI) and AMC Networks (NASDAQ:AMCX) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Valuation & Earnings

This table compares Scripps Networks Interactive and AMC Networks’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Scripps Networks Interactive $3.47 billion 3.25 $1.54 billion $4.84 17.92
AMC Networks $2.79 billion 1.40 $859.59 million $4.63 13.25

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

Volatility & Risk

Scripps Networks Interactive has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500. Comparatively, AMC Networks has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Institutional and Insider Ownership

70.6% of Scripps Networks Interactive shares are owned by institutional investors. Comparatively, 82.8% of AMC Networks shares are owned by institutional investors. 2.5% of Scripps Networks Interactive shares are owned by insiders. Comparatively, 17.7% of AMC Networks shares are owned 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

Scripps Networks Interactive pays an annual dividend of $1.20 per share and has a dividend yield of 1.4%. AMC Networks does not pay a dividend. Scripps Networks Interactive pays out 24.8% of its earnings in the form of a dividend.

Profitability

This table compares Scripps Networks Interactive and AMC Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scripps Networks Interactive 18.20% 32.04% 12.25%
AMC Networks 11.40% 683.16% 9.65%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Scripps Networks Interactive and AMC Networks, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scripps Networks Interactive 1 9 3 0 2.15
AMC Networks 1 6 6 0 2.38

Scripps Networks Interactive currently has a consensus price target of $82.92, suggesting a potential downside of 4.42%. AMC Networks has a consensus price target of $59.44, suggesting a potential downside of 3.07%. Given AMC Networks’ stronger consensus rating and higher probable upside, analysts plainly believe AMC Networks is more favorable than Scripps Networks Interactive.

Summary

Scripps Networks Interactive beats AMC Networks on 9 of the 16 factors compared between the two stocks.

Scripps Networks Interactive Company Profile

Scripps Networks Interactive, Inc. is a developer of lifestyle-oriented content, providing primarily home, food, travel and other lifestyle-related programing. The Company’s content is distributed through multiple methods, including television, the Internet, digital platforms and licensing arrangements. The Company’s segments include U.S. Networks, International Networks, and Corporate and Other. As of December 31, 2016, the Company’s U.S. Networks segment consisted of six national television networks: HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. The Company’s International Networks includes the TVN S.A. (TVN) portfolio of networks and other lifestyle-oriented networks available in the United Kingdom, other European markets, the Middle East and Africa (EMEA), Asia Pacific (APAC) and Latin America. In addition to the broadcast networks, it also licenses a portion of its programing to other broadcasters around the world.

AMC Networks Company Profile

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.

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