MSG Networks (NYSE:MSGN) vs. The Madison Square Garden (MSG) Critical Contrast

The Madison Square Garden (NYSE: MSG) and MSG Networks (NYSE:MSGN) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Insider & Institutional Ownership

85.2% of The Madison Square Garden shares are owned by institutional investors. Comparatively, 78.3% of MSG Networks shares are owned by institutional investors. 18.6% of The Madison Square Garden shares are owned by company insiders. Comparatively, 18.1% of MSG Networks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for The Madison Square Garden and MSG Networks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Madison Square Garden 1 3 7 0 2.55
MSG Networks 0 5 4 0 2.44

The Madison Square Garden currently has a consensus target price of $203.00, suggesting a potential downside of 5.87%. MSG Networks has a consensus target price of $24.13, suggesting a potential upside of 16.55%. Given MSG Networks’ higher probable upside, analysts clearly believe MSG Networks is more favorable than The Madison Square Garden.

Volatility and Risk

The Madison Square Garden has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, MSG Networks has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Earnings & Valuation

This table compares The Madison Square Garden and MSG Networks’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Madison Square Garden $1.23 billion 3.33 $97.01 million ($1.93) -111.74
MSG Networks $673.00 million 1.89 $323.63 million $2.33 8.88

MSG Networks has higher revenue, but lower earnings than The Madison Square Garden. The Madison Square Garden is trading at a lower price-to-earnings ratio than MSG Networks, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares The Madison Square Garden and MSG Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Madison Square Garden -3.81% -1.57% -1.12%
MSG Networks 26.21% -16.20% 20.43%

Summary

The Madison Square Garden beats MSG Networks on 8 of the 13 factors compared between the two stocks.

About The Madison Square Garden

The Madison Square Garden Company is a holding company, which is engaged in live experiences consisting of celebrated venues, sports teams, and entertainment productions. The Company operates in two segments, which include MSG Entertainment and MSG Sports. The MSG Sports segment includes the Company’s professional sports franchises, which include the New York Knicks (the Knicks) of the National Basketball Association (the NBA), the New York Rangers (the Rangers) of the National Hockey League (the NHL), the New York Liberty (the Liberty) of the Women’s National Basketball Association (the WNBA), the Hartford Wolf Pack of the American Hockey League (the AHL), which is the primary player development team for the Rangers, and the Westchester Knicks, an NBA Development League team. The MSG Entertainment segment includes the Company’s live entertainment events. The Company presents or hosts live entertainment events, including concerts, family shows, performing arts and special events.

About MSG Networks

MSG Networks Inc., formerly The Madison Square Garden Company, is engaged in sports production, and content development and distribution. The Company owns and operates two regional sports and entertainment networks, MSG Network (MSGN) and MSG+, collectively MSG Networks. Its networks are distributed throughout its territory, which includes all of New York State and significant portions of New Jersey and Connecticut, as well as parts of Pennsylvania. The Company delivers live games of the New York Knicks (the Knicks) of the National Basketball Association (NBA); the New York Rangers (the Rangers), New York Islanders (the Islanders), New Jersey Devils (the Devils) and Buffalo Sabres (the Sabres) of the National Hockey League (NHL); the New York Liberty (the Liberty) of the Women’s National Basketball Association; the New York Red Bulls (the Red Bulls) of Major League Soccer (MLS), and the Westchester Knicks of the National Basketball Association Developmental League.

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