Scholastic (NASDAQ:SCHL – Get Free Report) and New York Times (NYSE:NYT – Get Free Report) are both communication services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.
Profitability
This table compares Scholastic and New York Times’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Scholastic | 3.60% | 5.00% | 2.22% |
| New York Times | 13.41% | 23.06% | 15.82% |
Insider and Institutional Ownership
82.6% of Scholastic shares are owned by institutional investors. Comparatively, 95.4% of New York Times shares are owned by institutional investors. 12.8% of Scholastic shares are owned by insiders. Comparatively, 1.9% of New York Times shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
Scholastic has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, New York Times has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Scholastic and New York Times, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Scholastic | 0 | 3 | 0 | 0 | 2.00 |
| New York Times | 0 | 5 | 5 | 1 | 2.64 |
Scholastic currently has a consensus target price of $35.00, indicating a potential downside of 5.91%. New York Times has a consensus target price of $82.80, indicating a potential upside of 21.17%. Given New York Times’ stronger consensus rating and higher probable upside, analysts plainly believe New York Times is more favorable than Scholastic.
Dividends
Scholastic pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. New York Times pays an annual dividend of $0.92 per share and has a dividend yield of 1.3%. Scholastic pays out 71.4% of its earnings in the form of a dividend. New York Times pays out 36.8% 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. New York Times has raised its dividend for 7 consecutive years.
Earnings & Valuation
This table compares Scholastic and New York Times”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Scholastic | $1.57 billion | 0.45 | $56.70 million | $1.40 | 26.57 |
| New York Times | $3.05 billion | 3.62 | $343.98 million | $2.50 | 27.33 |
New York Times has higher revenue and earnings than Scholastic. Scholastic is trading at a lower price-to-earnings ratio than New York Times, indicating that it is currently the more affordable of the two stocks.
Summary
New York Times beats Scholastic on 15 of the 18 factors compared between the two stocks.
About Scholastic
Scholastic Corporation publishes and distributes children’s books worldwide. It operates in three segments: Children’s Book Publishing and Distribution, Education Solutions, and International. The Children’s Book Publishing and Distribution segment engages in publication and distribution of children’s print, digital, and audio books, as well as media and interactive products through its school reading events and trade channel; and operation of school-based book clubs and book fairs in the United States. Its original publications include The Harry Potter, The Hunger Games, The Bad Guys, The Baby-Sitters Club, The Magic School Bus, Captain Underpants, Dog Man, Wings of Fire, Cat Kid Comic Club, and Clifford The Big Red Dog, as well as I Survived, Goosebumps; licensed properties comprising the Peppa Pig and Pokemon; and publishes and creates Klutz and Make Believe Ideas titles, such as Mini Shake Shop, Pokemon Stained Glass, LEGO Miniature Photography, and the Never Touch series. The Education Solutions segment publishes and distributes classroom magazines under the Scholastic News, Scholastic Scope, Storyworks, Let’s Find Out, and Junior Scholastic names; supplemental and classroom materials and programs, and related support services; and print and on-line reference, and non-fiction products, as well as consulting services. The International segment publishes and distributes English, Hindi, and French language children’s books; and operates school-based marketing channels, as well as supply original and licensed children’s books, and supplemental educational materials including professional books for teachers. It distributes its products and services directly to schools and libraries through retail stores and the Internet. The company was founded in 1920 and is headquartered in New York, New York.
About New York Times
The New York Times Company, together with its subsidiaries, creates, collects, and distributes news and information worldwide. The company operates through two segments, The New York Times Group and The Athletic. It offers The New York Times (The Times) through company’s mobile application, website, printed newspaper, and associated content, such as podcast. The company also offers The Athletic, a sports media product; Cooking, a recipe product; Games, a puzzle games product; and Audio, an audio product. In addition, it offers a portfolio of advertising products and services to advertisers, such as luxury goods, technology, and financial companies, to promote products, services or brands on digital platforms in the form of display ads, audio and video, in print in the form of column-inch ads, and at live events; and Wirecutter, a product review and recommendation product. Further, the company licenses content to digital aggregators in the business, professional, academic and library markets, and third-party digital platforms; articles, graphics, and photographs, including newspapers, magazines, and websites; and for use in television, films, and books, as well as provide rights to reprint articles, and create and sell new digests. Additionally, it engages in commercial printing and distribution for third parties; and operates the NYTimes.com website. The company was founded in 1851 and is headquartered in New York, New York.
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