The Madison Square Garden (NYSE: MSG) and MSG Networks (NYSE:MSGN) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitabiliy, valuation, dividends, earnings, institutional ownership and analyst recommendations.
Valuation & Earnings
This table compares The Madison Square Garden and MSG Networks’ top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| The Madison Square Garden | $1.23 billion | 3.35 | $97.01 million | ($1.93) | -112.26 |
| MSG Networks | $673.00 million | 1.85 | $323.63 million | $2.33 | 8.69 |
MSG Networks has higher revenue, but lower earnings than The Madison Square Garden. The Madison Square Garden is trading at a lower price-to-earnings ratio than MSG Networks, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
The Madison Square Garden has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, MSG Networks has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings for The Madison Square Garden and MSG Networks, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| The Madison Square Garden | 1 | 3 | 7 | 0 | 2.55 |
| MSG Networks | 1 | 4 | 4 | 0 | 2.33 |
The Madison Square Garden presently has a consensus target price of $203.00, suggesting a potential downside of 6.30%. MSG Networks has a consensus target price of $24.00, suggesting a potential upside of 18.52%. Given MSG Networks’ higher possible upside, analysts plainly believe MSG Networks is more favorable than The Madison Square Garden.
Profitability
This table compares The Madison Square Garden and MSG Networks’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| The Madison Square Garden | -3.81% | -1.57% | -1.12% |
| MSG Networks | 26.21% | -16.20% | 20.43% |
Institutional & Insider Ownership
85.0% of The Madison Square Garden shares are held by institutional investors. Comparatively, 78.3% of MSG Networks shares are held by institutional investors. 18.6% of The Madison Square Garden shares are held by insiders. Comparatively, 18.1% of MSG Networks shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
The Madison Square Garden beats MSG Networks on 8 of the 13 factors compared between the two stocks.
The Madison Square Garden Company Profile
The Madison Square Garden Company is a holding company, which is engaged in live experiences consisting of celebrated venues, sports teams, and entertainment productions. The Company operates in two segments, which include MSG Entertainment and MSG Sports. The MSG Sports segment includes the Company’s professional sports franchises, which include the New York Knicks (the Knicks) of the National Basketball Association (the NBA), the New York Rangers (the Rangers) of the National Hockey League (the NHL), the New York Liberty (the Liberty) of the Women’s National Basketball Association (the WNBA), the Hartford Wolf Pack of the American Hockey League (the AHL), which is the primary player development team for the Rangers, and the Westchester Knicks, an NBA Development League team. The MSG Entertainment segment includes the Company’s live entertainment events. The Company presents or hosts live entertainment events, including concerts, family shows, performing arts and special events.
MSG Networks Company Profile
MSG Networks Inc., formerly The Madison Square Garden Company, is engaged in sports production, and content development and distribution. The Company owns and operates two regional sports and entertainment networks, MSG Network (MSGN) and MSG+, collectively MSG Networks. Its networks are distributed throughout its territory, which includes all of New York State and significant portions of New Jersey and Connecticut, as well as parts of Pennsylvania. The Company delivers live games of the New York Knicks (the Knicks) of the National Basketball Association (NBA); the New York Rangers (the Rangers), New York Islanders (the Islanders), New Jersey Devils (the Devils) and Buffalo Sabres (the Sabres) of the National Hockey League (NHL); the New York Liberty (the Liberty) of the Women’s National Basketball Association; the New York Red Bulls (the Red Bulls) of Major League Soccer (MLS), and the Westchester Knicks of the National Basketball Association Developmental League.
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