Contrasting Gray Media (NYSE:GTN) and Stagwell (NASDAQ:STGW)
by Tristan Rich · The Markets DailyStagwell (NASDAQ:STGW – Get Free Report) and Gray Media (NYSE:GTN – Get Free Report) are both communication services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.
Earnings and Valuation
This table compares Stagwell and Gray Media”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Stagwell | $2.91 billion | 0.70 | $29.10 million | $0.06 | 138.67 |
| Gray Media | $3.10 billion | 0.15 | -$85.00 million | ($0.61) | -7.52 |
Stagwell has higher earnings, but lower revenue than Gray Media. Gray Media is trading at a lower price-to-earnings ratio than Stagwell, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Stagwell has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Gray Media has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Stagwell and Gray Media, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Stagwell | 0 | 2 | 5 | 0 | 2.71 |
| Gray Media | 1 | 2 | 3 | 0 | 2.33 |
Stagwell presently has a consensus target price of $9.60, suggesting a potential upside of 15.38%. Gray Media has a consensus target price of $7.88, suggesting a potential upside of 71.76%. Given Gray Media’s higher probable upside, analysts plainly believe Gray Media is more favorable than Stagwell.
Institutional & Insider Ownership
35.6% of Stagwell shares are owned by institutional investors. Comparatively, 78.6% of Gray Media shares are owned by institutional investors. 11.2% of Stagwell shares are owned by insiders. Comparatively, 8.9% of Gray Media shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Stagwell and Gray Media’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Stagwell | 0.53% | 27.30% | 4.77% |
| Gray Media | -0.83% | -1.12% | -0.23% |
Summary
Stagwell beats Gray Media on 11 of the 14 factors compared between the two stocks.
About Stagwell
Stagwell Inc. provides digital transformation, performance media and data, consumer insights and strategy, and creativity and communications services. The company operates through three segments: Integrated Agencies Network, Brand Performance Network, and Communications Network. It designs and builds digital platforms and experiences that support the delivery of content, commerce, service, and sales; creates websites, mobile applications, back-end systems, content and data management systems, and other digital environments; designs and implements technology and data strategies; and develops software and related technology products, including artificial intelligence (AI)-enabled communications, research, and media technology, cookie-less data platforms for advance targeting and activation, software tools for e-commerce applications, specialty media solutions in the augmented reality space, and text messaging applications for consumer engagement. The company also provides audience analysis, and media buying and planning services; and strategic insights and guidance services that offers business content, product, communications, and media strategies. In addition, it offers strategy development, advertising creation, live events, immersive digital experiences, cross platform engagement, and social media content services; and leadership, investor and financial relations, social media, executive positioning and visibility, strategic communication, public relation, and public affair services. Further, the company provides Stagwell Marketing Cloud, a suite of software-as-a-service (SaaS) and data-as-a-service (DaaS) technology solutions, including research and insights, communications technology, advance media platform, and media studios; and technology-driven solutions for in-house marketers. Stagwell Inc. is headquartered in New York, New York.
About Gray Media
Gray Television, Inc., a television broadcasting company, owns and/or operates television stations and digital assets in the United States. It also broadcasts secondary digital channels affiliated to ABC, CBS, NBC, and FOX, as well as various other networks and program services, including CW Plus Network, MY Network, the MeTV Network, Circle, Telemundo, THE365, and Outlaw; and local news/weather channels in various markets. It owns and operates television stations and digital assets that serve television markets in the United States. 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 1891 and is headquartered in Atlanta, Georgia.