Analyzing FOX (NASDAQ:FOX) and Warner Bros. Discovery (NASDAQ:WBD)

Warner Bros. Discovery (NASDAQ:WBD) and FOX (NASDAQ:FOX) are both large-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Institutional and Insider Ownership

60.0% of Warner Bros. Discovery shares are owned by institutional investors. Comparatively, 26.4% of FOX shares are owned by institutional investors. 1.9% of Warner Bros. Discovery shares are owned by company insiders. Comparatively, 23.1% of FOX shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Warner Bros. Discovery and FOX, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Warner Bros. Discovery	2	15	5	1	2.22
FOX	1	2	4	0	2.43

Warner Bros. Discovery currently has a consensus price target of $26.30, suggesting a potential downside of 3.72%. FOX has a consensus price target of $75.00, suggesting a potential upside of 41.86%. Given FOX’s stronger consensus rating and higher possible upside, analysts plainly believe FOX is more favorable than Warner Bros. Discovery.

Valuation & Earnings

This table compares Warner Bros. Discovery and FOX”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Warner Bros. Discovery	$37.30 billion	1.82	$727.00 million	$0.29	94.21
FOX	$16.30 billion	1.38	$2.26 billion	$4.16	12.71

FOX has lower revenue, but higher earnings than Warner Bros. Discovery. FOX is trading at a lower price-to-earnings ratio than Warner Bros. Discovery, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Warner Bros. Discovery and FOX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Warner Bros. Discovery	1.95%	1.98%	0.72%
FOX	11.41%	18.14%	9.40%

Volatility & Risk

Warner Bros. Discovery has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500. Comparatively, FOX has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Summary

FOX beats Warner Bros. Discovery on 8 of the 15 factors compared between the two stocks.

About Warner Bros. Discovery

Warner Bros. Discovery, Inc. operates as a media and entertainment company worldwide. It operates through three segments: Studios, Network, and DTC. The Studios segment produces and releases feature films for initial exhibition in theaters; produces and licenses television programs to its networks and third parties and direct-to-consumer services; distributes films and television programs to various third parties and internal television; and offers streaming services and distribution through the home entertainment market, themed experience licensing, and interactive gaming. The Network segment comprises domestic and international television networks. The DTC segment offers premium pay-tv and streaming services. In addition, the company offers portfolio of content, brands, and franchises across television, film, streaming, and gaming under the Warner Bros. Motion Picture Group, Warner Bros. Television Group, DC, HBO, HBO Max, Max, Discovery Channel, discovery+, CNN, HGTV, Food Network, TNT Sports, TBS, TLC, OWN, Warner Bros. Games, Batman, Superman, Wonder Woman, Harry Potter, Looney Tunes, Hanna-Barbera, Game of Thrones, and The Lord of the Rings brands. Further, it provides content through distribution platforms, including linear network, free-to-air, and broadcast television; authenticated GO applications, digital distribution arrangements, content licensing arrangements, and direct-to-consumer subscription products. Warner Bros. Discovery, Inc. was incorporated in 2008 and is headquartered in New York, New York.

About FOX

Fox Corporation operates as a news, sports, and entertainment company in the United States (U.S.). The company operates through four segments: Cable Network Programming, Television, Credible, and The FOX Studio Lot. The Cable Network Programming segment produces and licenses news and sports content for distribution through traditional cable television systems, direct broadcast satellite operators and telecommunication companies, virtual multi-channel video programming distributors, and other digital platforms primarily in the U.S. Television segment produces, acquires, markets, and distributes programming through the FOX broadcast network, advertising supported video-on-demand service Tubi, and operates power broadcast television stations including duopolies and other digital platform; and produces content for third parties. The Credible segment engages in the consumer finance marketplace. The FOX Studio Lot segment provides television and film production services along with office space, studio operation services and includes all operations of the facility. The company was incorporated in 2018 and is headquartered in New York, New York.