Saga Communications (NASDAQ:SGA – Get Free Report) and Sinclair (NASDAQ:SBGI – Get Free Report) are both small-cap communication services companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.
Dividends
Saga Communications pays an annual dividend of $1.00 per share and has a dividend yield of 13.7%. Sinclair pays an annual dividend of $1.00 per share and has a dividend yield of 6.6%. Saga Communications pays out -72.5% of its earnings in the form of a dividend. Sinclair pays out 73.0% 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. Saga Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Saga Communications has a beta of -0.12, indicating that its share price is 112% less volatile than the S&P 500. Comparatively, Sinclair has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.
Institutional and Insider Ownership
74.3% of Saga Communications shares are owned by institutional investors. Comparatively, 41.7% of Sinclair shares are owned by institutional investors. 23.2% of Saga Communications shares are owned by company insiders. Comparatively, 42.1% of Sinclair shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Saga Communications and Sinclair”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Saga Communications | $103.94 million | 0.45 | -$7.90 million | ($1.38) | -5.27 |
| Sinclair | $3.17 billion | 0.34 | -$112.00 million | $1.37 | 11.03 |
Saga Communications has higher earnings, but lower revenue than Sinclair. Saga Communications is trading at a lower price-to-earnings ratio than Sinclair, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings and target prices for Saga Communications and Sinclair, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Saga Communications | 1 | 2 | 0 | 0 | 1.67 |
| Sinclair | 1 | 3 | 2 | 0 | 2.17 |
Sinclair has a consensus price target of $19.40, indicating a potential upside of 28.43%. Given Sinclair’s stronger consensus rating and higher probable upside, analysts plainly believe Sinclair is more favorable than Saga Communications.
Profitability
This table compares Saga Communications and Sinclair’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Saga Communications | -8.55% | 3.87% | 2.90% |
| Sinclair | 2.84% | -4.00% | -0.25% |
Summary
Sinclair beats Saga Communications on 9 of the 16 factors compared between the two stocks.
About Saga Communications
Saga Communications, Inc. is a broadcast media company that owns and operates radio stations in markets across the United States. Its stations offer a mix of programming formats, including music, news, talk, sports, and other locally focused content designed to serve regional audiences. In addition to traditional AM and FM broadcasting, Saga provides digital media and marketing services to advertisers. These services may include online audio, streaming, website and social media advertising, and other multimedia solutions that complement its radio platforms.
About Sinclair
Sinclair, Inc., formerly known as Sinclair Broadcast Group, is a U.S. media company focused on local television broadcasting. Its stations provide local news, sports and entertainment programming, often alongside content from major television networks. The company also operates national television brands, including Tennis Channel and the multicast networks Comet, Charge! and TBD. Its businesses include producing and distributing programming and selling advertising across its television and digital platforms.
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