Analyzing Gray Media (NYSE:GTN.A) and Townsquare Media (NYSE:TSQ)

Gray Media (NYSE:GTN.A) and Townsquare Media (NYSE:TSQ) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Risk and Volatility

Gray Media has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Townsquare Media has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares Gray Media and Townsquare Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gray Media	5.64%	10.31%	2.17%
Townsquare Media	7.93%	-56.87%	3.43%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Gray Media and Townsquare Media, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gray Media	0	0	0	0	0.00
Townsquare Media	0	0	2	0	3.00

Townsquare Media has a consensus target price of $17.00, indicating a potential upside of 156.41%. Given Townsquare Media’s stronger consensus rating and higher possible upside, analysts plainly believe Townsquare Media is more favorable than Gray Media.

Earnings and Valuation

This table compares Gray Media and Townsquare Media”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gray Media	$3.64 billion	0.27	$375.00 million	$1.51	6.42
Townsquare Media	$450.98 million	0.24	-$10.93 million	$2.02	3.28

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

Institutional and Insider Ownership

0.3% of Gray Media shares are owned by institutional investors. Comparatively, 71.7% of Townsquare Media shares are owned by institutional investors. 13.3% of Gray Media shares are owned by company insiders. Comparatively, 30.5% of Townsquare Media shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Gray Media pays an annual dividend of $0.32 per share and has a dividend yield of 3.3%. Townsquare Media pays an annual dividend of $0.80 per share and has a dividend yield of 12.1%. Gray Media pays out 21.2% of its earnings in the form of a dividend. Townsquare Media pays out 39.6% 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. Townsquare Media has raised its dividend for 3 consecutive years. Townsquare Media is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Townsquare Media beats Gray Media on 11 of the 17 factors compared between the two stocks.

About Gray Media

Gray Television, Inc., a television broadcast company, owns and operates television stations and digital assets in the United States. As of February 28, 2019, it owned and operated television stations in 91 television markets broadcasting approximately 400 program streams, including approximately 150 channels affiliated with the CBS Network, the NBC Network, the ABC Network, and the FOX Network. The company also broadcasts secondary digital channels affiliated to ABC, CBS, and FOX, as well as channels affiliated with various other networks and program services, including CW Plus Network, MY Network, the MeTV Network, This TV Network, Antenna TV, Telemundo, Cozi, Heroes and Icons, and MOVIES! Network; and local news/weather channels in various markets. In addition, it is also involved in the video program production, marketing, and digital businesses including Raycom Sports, Tupelo-Raycom, and RTM Studios; and production of PowerNation programs and content. The company was formerly known as Gray Communications Systems, Inc. and changed its name to Gray Television, Inc. in August 2002. Gray Television, Inc. was founded in 1897 and is headquartered in Atlanta, Georgia.

About Townsquare Media

Townsquare Media, Inc. operates as a digital media and marketing solutions company in small and medium-sized businesses. It operates through three segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising. The Subscription Digital Marketing Solutions segment offers website design, creation, and development, as well as hosting services; and search engine optimization, online directory optimization, e-commerce solutions, online reputation monitoring, social media management, appointment scheduling, payment and invoice, customer management, and email and SMS marketing services. The Digital Advertising segment provides digital advertising on its owned and operated, digital programmatic advertising, and data analytics and management platform. The Broadcast Advertising segment engages in the sale of advertising on local radio stations to local, regional, and national spot advertisers, as well as national network advertisers. It also owns and operates live events, including concerts, expositions, and other experiential events; and operates local media under the WYRK.com, WJON.com, and NJ101.5.com brands, as well as national music under the XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com brands. The company was formerly known as Regent Communications, Inc. and changed its name to Townsquare Media, Inc. in May 2010. Townsquare Media, Inc. is headquartered in Purchase, New York.