Discovery (DISCA) and Liberty Latin America (LILA) Head to Head Analysis

Discovery (NASDAQ: DISCA) and Liberty Latin America (NASDAQ:LILA) are both mid-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.

Insider & Institutional Ownership

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48.9% of Discovery shares are held by institutional investors. Comparatively, 22.3% of Liberty Latin America shares are held by institutional investors. 6.7% of Discovery shares are held by company insiders. Comparatively, 8.4% of Liberty Latin America shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Discovery and Liberty Latin America’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Discovery $6.87 billion 1.32 -$337.00 million $2.24 10.58
Liberty Latin America $3.59 billion 0.96 -$70.20 million ($0.41) -49.12

Liberty Latin America has lower revenue, but higher earnings than Discovery. Liberty Latin America is trading at a lower price-to-earnings ratio than Discovery, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Discovery and Liberty Latin America, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Discovery 1 13 6 0 2.25
Liberty Latin America 1 4 1 0 2.00

Discovery presently has a consensus price target of $24.94, suggesting a potential upside of 5.30%. Liberty Latin America has a consensus price target of $25.00, suggesting a potential upside of 24.13%. Given Liberty Latin America’s higher probable upside, analysts plainly believe Liberty Latin America is more favorable than Discovery.

Profitability

This table compares Discovery and Liberty Latin America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Discovery -4.90% 21.68% 5.92%
Liberty Latin America N/A N/A N/A

Risk and Volatility

Discovery has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500. Comparatively, Liberty Latin America has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.

Summary

Discovery beats Liberty Latin America on 9 of the 14 factors compared between the two stocks.

About Discovery

Discovery Communications, Inc. operates as a media company worldwide. The company operates through U.S. Networks, International Networks, and Education and Other segments. It owns and operates various television networks under the Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science Channel, Velocity, Discovery Family Channel, Destination America, American Heroes Channel, Discovery Life, The Oprah Winfrey Network, Eurosport, Discovery Kids, DMAX, and Discovery Home & Health brands, as well as other regional television networks. The company's content spans genres, including survival, exploration, sports, lifestyle, general entertainment, heroes, adventure, crime and investigation, health, and kids. It also develops and sells curriculum-based education products and services, such as an online suite of curriculum-based video on demand (VOD) tools, professional development services, and digital textbooks, as well as student assessments; and publishes hard copy curriculum-based content for K-12 schools. In addition, the company operates production studios that develop content; and Websites. It provides content through various distribution platforms comprising pay-television, free-to-air and broadcast television, Websites, digital distribution arrangements, and content licensing agreements, as well as various platforms that include brand-aligned Websites, online streaming, mobile devices, VOD, and broadband channels. As of December 31, 2017, the company operated approximately 400 distribution feeds in 40 languages internationally. Discovery Communications, Inc. was founded in 1985 and is headquartered in Silver Spring, Maryland.

About Liberty Latin America

Liberty Latin America Ltd. provides various telecommunications services. Its services primarily include video, broadband Internet, fixed-line telephony, and mobile services. The company offers communications and entertainment services to residential and business customers; and business products and services that include enterprise-grade connectivity, data center, hosting, and managed solutions, as well as information technology solutions for small and medium enterprises, international companies, and governmental agencies. It also operates a sub-sea and terrestrial fiber optic cable network that connects approximately 40 markets. The company provides its services in 18 countries in Latin America and the Caribbean under the brands of C&W, BTC, Flow, Móvil, VTR, and Liberty. Liberty Latin America Ltd. was incorporated in 2017 and is based in Denver, Colorado.

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