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

News Corporation and Warner Music Group Corp. are both Entertainment companies. Warner Music Group Corp. is the larger, with a market value of $16.7B against $14.8B — 1.1× the size. News Corporation trades at the lower P/E: 23.9× against 24.9×. Warner Music Group Corp. grew revenue faster over the last twelve months: 12.9% against 7.82%. Warner Music Group Corp. has the higher net margin (9.20% vs 6.76%) and the higher return on invested capital (12.4% vs 0.00%). Both pay a dividend; Warner Music Group Corp. yields more (2.41% vs 0.75%). Across the 23 metrics below, News Corporation leads on 14 and Warner Music Group Corp. on 9.

Valuation

Metric NWSA WMG Entertainment median
P/E 23.89 24.94 24.17
P/S 1.58 2.28 1.36
P/B 1.57 17.47 1.75
Price to free cash flow 19.59 19.92 17.36
EV/EBITDA 9.04 14.72 8.85
EV/Sales 1.61 2.86 1.68
Earnings yield 4.19% 4.01% (1.47%)
Free cash flow yield 5.10% 5.02% 3.98%

Profitability

Metric NWSA WMG Entertainment median
Gross margin 57.02% 45.77% 40.04%
Operating margin 0.00% 13.69% 2.30%
Net margin 6.76% 9.20% 0.00%
Free cash flow margin 12.71% 11.45% 4.34%
Return on equity 6.69% 76.15% 2.72%
Return on assets 4.03% 6.55% 0.00%
Return on invested capital 0.00% 12.39% 0.55%

Growth

Metric NWSA WMG Entertainment median
Revenue growth (TTM) 7.82% 12.91% 8.28%
EPS growth (last fiscal year) (50.24%) (16.87%) 9.67%
Revenue growth, 5-year CAGR (0.72%) 8.49% 10.07%
Net income growth, 5-year CAGR 11.67% 0.00% 0.00%

Health

Metric NWSA WMG Entertainment median
Debt to equity 0.22 4.94 0.46
Current ratio 1.62 0.73 1.00
Net debt to EBITDA (0.07) 3.58 0.97

Dividend

Metric NWSA WMG Entertainment median
Dividend yield 0.75% 2.41% 1.23%
Payout ratio 0.18 0.61 0.26

Size

Metric NWSA WMG Entertainment median
Market cap 14.75b 16.70b 3.27b

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