News Corporation (NWS) vs Warner Music Group Corp. (WMG)

News Corporation and Warner Music Group Corp. are both Entertainment companies. News Corporation is the larger, with a market value of $15.9B against $14.3B — 1.1× the size. Warner Music Group Corp. trades at the lower P/E: 21.2× against 30.8×. Warner Music Group Corp. grew revenue faster over the last twelve months: 12.9% against 6.81%. Warner Music Group Corp. has the higher net margin (9.20% vs 6.35%) and the higher return on invested capital (12.4% vs 7.82%). Both pay a dividend; Warner Music Group Corp. yields more (1.51% vs 0.77%). Across the 23 metrics below, Warner Music Group Corp. leads on 15 and News Corporation on 8.

Valuation

Metric NWS WMG Entertainment median
P/E 30.83 21.20 22.03
P/S 1.96 1.94 1.47
P/B 1.91 14.86 2.00
Price to free cash flow 21.79 16.94 16.60
EV/EBITDA 10.81 12.91 9.65
EV/Sales 1.95 2.50 1.76
Earnings yield 3.24% 4.72% (0.67%)
Free cash flow yield 4.59% 5.90% 3.26%

Profitability

Metric NWS WMG Entertainment median
Gross margin 56.89% 45.77% 45.02%
Operating margin 12.65% 13.69% 2.30%
Net margin 6.35% 9.20% 0.00%
Free cash flow margin 8.98% 11.45% 1.56%
Return on equity 6.15% 76.15% 0.00%
Return on assets 3.69% 6.55% 0.00%
Return on invested capital 7.82% 12.39% 0.00%

Growth

Metric NWS WMG Entertainment median
Revenue growth (TTM) 6.81% 12.91% 5.07%
EPS growth (last fiscal year) (50.24%) (16.87%) —
Revenue growth, 5-year CAGR (0.72%) 8.49% 10.25%
Net income growth, 5-year CAGR 11.67% 0.00% 0.00%

Health

Metric NWS WMG Entertainment median
Debt to equity 0.22 4.94 0.46
Current ratio 1.62 0.73 0.86
Net debt to EBITDA (0.07) 3.58 0.72

Dividend

Metric NWS WMG Entertainment median
Dividend yield 0.77% 1.51% 1.16%
Payout ratio 0.77 0.78 0.00

Size

Metric NWS WMG Entertainment median
Market cap 15.88b 14.28b 1.87b

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