Time Warner (NYSE: RCI) and Rogers Communications Inc. Class B (NYSE:RCI) are both large-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.
This is a breakdown of current ratings and price targets for Time Warner and Rogers Communications Inc. Class B, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Rogers Communications Inc. Class B||0||3||2||0||2.40|
Time Warner presently has a consensus target price of $102.90, indicating a potential upside of 4.03%. Rogers Communications Inc. Class B has a consensus target price of $62.00, indicating a potential upside of 21.21%. Given Rogers Communications Inc. Class B’s stronger consensus rating and higher probable upside, analysts clearly believe Rogers Communications Inc. Class B is more favorable than Time Warner.
Valuation and Earnings
This table compares Time Warner and Rogers Communications Inc. Class B’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Time Warner||$31.27 billion||2.47||$5.25 billion||$6.42||15.41|
|Rogers Communications Inc. Class B||$10.91 billion||2.41||$1.32 billion||$2.71||18.87|
Time Warner has higher revenue and earnings than Rogers Communications Inc. Class B. Time Warner is trading at a lower price-to-earnings ratio than Rogers Communications Inc. Class B, indicating that it is currently the more affordable of the two stocks.
Time Warner pays an annual dividend of $1.61 per share and has a dividend yield of 1.6%. Rogers Communications Inc. Class B pays an annual dividend of $1.48 per share and has a dividend yield of 2.9%. Time Warner pays out 25.1% of its earnings in the form of a dividend. Rogers Communications Inc. Class B pays out 54.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Institutional and Insider Ownership
78.9% of Time Warner shares are owned by institutional investors. Comparatively, 46.1% of Rogers Communications Inc. Class B shares are owned by institutional investors. 0.2% of Time Warner shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Time Warner and Rogers Communications Inc. Class B’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Rogers Communications Inc. Class B||12.66%||29.52%||6.87%|
Risk & Volatility
Time Warner has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Rogers Communications Inc. Class B has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.
Time Warner beats Rogers Communications Inc. Class B on 11 of the 16 factors compared between the two stocks.
Time Warner Company Profile
Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates through three segments: Turner, Home Box Office, and Warner Bros. The Turner segment creates and programs branded news, entertainment, sports, and kids multi-platform content for consumers. It operates approximately 175 channels in 200 countries and territories. The Turner segment's networks and related businesses and brands include TNT, TBS, Adult Swim, truTV, Turner Classic Movies, Turner Sports, Bleacher Report, Cartoon Network, Boomerang, CNN, HLN, and iStreamPlanet; and digital properties comprise tntdrama.com, TBS.com, adultswim.com, and cartoonnetwork.com, as well as NBA.com, the NBA League Pass property, NCAA.com, the NCAA March Madness Live app, and PGA.com. It also licenses its original programming, and its brands and characters for consumer products and other business ventures. The Home Box Office segment provides premium pay and basic tier television, and video content services comprising HBO and Cinemax; operates HBO NOW, a video content service; and sells original programming through physical and digital formats, as well as licenses original programming through international television networks and video content services. As of December 31, 2017, this segment had 54 million domestic subscribers. The Warner Bros. segment produces, distributes, and licenses television programming and feature films; distributes digital and physical home entertainment products; and produces and distributes games, as well as licenses consumer products and brands. Time Warner Inc. serves cable system operators, satellite service distributors, telephone companies, and virtual multichannel video programming distributors, as well as digital distributors. The company was formerly known as AOL Time Warner, Inc. and changed its name to Time Warner Inc. in 2003. Time Warner Inc. was founded in 1985 and is headquartered in New York, New York.
Rogers Communications Inc. Class B Company Profile
Rogers Communications Inc. operates as a communications and media company in Canada. The company's Wireless segment offers wireless telecommunications services to consumers and businesses under the Rogers, Fido, and chatr brands; and wireless devices, services, and applications. This segment distributes its products through independent dealer networks, company-owned retail stores, retail chains and convenience stores, e-commerce sites, call centers and outbound telemarketing, and other distribution channels. As of December 31, 2017, it had approximately 10.5 million subscribers. The company's Cable segment provides high-speed broadband Internet access, digital television and online viewing, phone, and home Wi-Fi services to consumers, businesses, and enterprises; and monitoring, security, automation, energy efficiency, and smart control services. This segment also offers network connectivity services through its fiber network and data center assets through its sales team, third-party retailers, and a network of third-party channel distributors to the enterprise, public sector, and carrier wholesale markets. It distributes its products through company-owned retail stores, e-commerce sites, call centers, outbound telemarketing, door-to-door agents, and other retail locations. This segment had approximately 2.2 million high-speed Internet subscribers, 1.7 million television subscribers, and 1.1 million phone subscribers, as well as operated a network that passes 4.3 million homes. Its Media segment offers multi-platform televised and online shopping, digital media services, and publishing services; and operates television networks and radio stations, as well as owns the Toronto Blue Jays, a league baseball team and Rogers Centre event venue. The company also provides credit cards. Rogers Communications Inc. was founded in 1920 and is headquartered in Toronto, Canada.
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