Time (NYSE:TIME) versus Gannett Co. (GCI) Financial Analysis

Time (NYSE: TIME) and Gannett Co. (NYSE:GCI) are both small-cap consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitabiliy.

Earnings & Valuation

This table compares Time and Gannett Co.’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Time	$3.03 billion	0.45	$383.00 million	($0.68)	-20.37
Gannett Co.	$3.16 billion	0.30	$317.33 million	$0.08	105.88

Time has higher revenue, but lower earnings than Gannett Co.. Time is trading at a lower price-to-earnings ratio than Gannett Co., indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Time has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, Gannett Co. has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Dividends

Time pays an annual dividend of $0.16 per share and has a dividend yield of 1.2%. Gannett Co. pays an annual dividend of $0.64 per share and has a dividend yield of 7.6%. Time pays out -23.5% of its earnings in the form of a dividend. Gannett Co. pays out 800.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent recommendations for Time and Gannett Co., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Time	0	4	1	0	2.20
Gannett Co.	0	1	1	0	2.50

Time currently has a consensus price target of $15.20, indicating a potential upside of 9.75%. Gannett Co. has a consensus price target of $16.00, indicating a potential upside of 88.90%. Given Gannett Co.’s stronger consensus rating and higher probable upside, analysts clearly believe Gannett Co. is more favorable than Time.

Profitability

This table compares Time and Gannett Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Time	-2.18%	7.30%	2.54%
Gannett Co.	0.33%	12.11%	4.29%

Insider & Institutional Ownership

90.7% of Time shares are owned by institutional investors. Comparatively, 84.0% of Gannett Co. shares are owned by institutional investors. 1.9% of Time shares are owned by insiders. Comparatively, 0.7% of Gannett Co. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Gannett Co. beats Time on 8 of the 15 factors compared between the two stocks.

About Time

Time Inc. is a media and content company. The Company offers a portfolio of news and lifestyle brands across a range of interest areas. As of December 31, 2016, the Company’s brands included People, Time, Fortune, Sports Illustrated, InStyle, Real Simple, Southern Living, Entertainment Weekly, Food & Wine, Travel + Leisure and Essence, as well as approximately 50 titles in the United Kingdom. The Company also offers its brands through other media and platforms including licensing, video and television, live events and paid products and services. The Company also offers events, such as the Time 100, Fortune Most Powerful Women, People’s Sexiest Man Alive, Sports Illustrated’s Sportsperson of the Year, the Essence Festival and the Food & Wine Classic in Aspen. It is a subscription marketer in the United States media industry. It also offers its advertisers a range of analytics and research services, including consumer insights, audience measurement and accountability reporting.

About Gannett Co.

Gannett Co., Inc. is a media company. The Company operates as a newspaper publisher in the United States. As of December 25, 2016, it owned ReachLocal, Inc. (ReachLocal), a digital marketing solutions company; the USA TODAY NETWORK (made up of USA TODAY including digital sites and affiliates (USAT) and 109 local media organizations in 34 states in the United States and Guam), and Newsquest Media Group Ltd. (Newsquest), the Company’s subsidiary operating in the United Kingdom. The Company’s segments include Publishing, ReachLocal, and a Corporate and Other category. The publishing segment comprises the USA TODAY NETWORK and Newsquest. Its publishing operations also include commercial printing and distribution, marketing and data services. It also reaches small and medium sized businesses with digital marketing solutions principally through ReachLocal. ReachLocal is focused on local businesses and on providing a total digital marketing solution.