Comparing Pearson (NYSE:PSO) & Sinclair (NASDAQ:SBGI)

Sinclair (NASDAQ:SBGI) and Pearson (NYSE:PSO) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Sinclair and Pearson, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sinclair	1	2	2	0	2.20
Pearson	0	0	1	1	3.50

Sinclair currently has a consensus target price of $18.50, indicating a potential upside of 31.21%. Pearson has a consensus target price of $18.00, indicating a potential upside of 20.32%. Given Sinclair’s higher possible upside, equities analysts plainly believe Sinclair is more favorable than Pearson.

Volatility & Risk

Sinclair has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Pearson has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Valuation & Earnings

This table compares Sinclair and Pearson”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sinclair	$3.55 billion	0.28	$310.00 million	$2.01	7.01
Pearson	$4.54 billion	2.15	$554.61 million	$0.94	15.91

Pearson has higher revenue and earnings than Sinclair. Sinclair is trading at a lower price-to-earnings ratio than Pearson, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

41.7% of Sinclair shares are owned by institutional investors. Comparatively, 2.1% of Pearson shares are owned by institutional investors. 46.6% of Sinclair shares are owned by company insiders. Comparatively, 0.1% of Pearson shares are owned 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.

Dividends

Sinclair pays an annual dividend of $1.00 per share and has a dividend yield of 7.1%. Pearson pays an annual dividend of $0.44 per share and has a dividend yield of 2.9%. Sinclair pays out 49.8% of its earnings in the form of a dividend. Pearson pays out 46.8% 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.

Profitability

This table compares Sinclair and Pearson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sinclair	3.72%	34.15%	2.23%
Pearson	N/A	N/A	N/A

Summary

Sinclair beats Pearson on 10 of the 17 factors compared between the two stocks.

About Sinclair

Sinclair, Inc., a media company, provides content on local television stations and digital platforms in the United States. It operates through two segments, Local Media and Tennis. The Local Media segment operates broadcast television stations, original networks, and content; provides free-over-the-air programming and live local sporting events on its stations; distributes its content to multi-channel video programming distributors in exchange for contractual fees; and produces local and original news programs. This segment operates The Nest, a free over-the-air national broadcast TV network; Comet, a science fiction network; CHARGE!, an adventure and action-based network; and TBD, a multiscreen TV network. The Tennis segment offers Tennis Channel, a cable network which includes coverage of tennis' top tournaments and original professional sports, and tennis lifestyle shows; Tennis Channel International streaming service; Tennis Channel Plus streaming service; T2 FAST, a 24-hours a day free ad-supported streaming television channel; and Tennis.com and Pickleballtv. It also provides digital and internet solutions; and technical services, including the design and manufacture of broadcast systems. The company distributes its content through broadcast platforms and third-party platforms that consist of programming provided by third-party networks and syndicators, local news, and other original programming. Sinclair, Inc. was founded in 1971 and is headquartered in Hunt Valley, Maryland.

About Pearson

Pearson plc offers educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally. The company operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills, and Higher Education. The Assessment & Qualifications segment offers Pearson VUE, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications and associated courseware. The Virtual Learning segment provides virtual schools and online program management services. The English Language Learning segment offers Pearson test of English, institutional courseware, and English online solutions. The Workforce Skills offers BTEC, GED, TalentLens, Faethm, Credly, Pearson college, and apprenticeships. The Higher Education segment engages in the US, Canadian, and international higher education courseware businesses. The company was founded in 1844 and is headquartered in London, the United Kingdom.