Comparing USA Today (NYSE:TDAY) and National CineMedia (NASDAQ:NCMI)

USA Today (NYSE:TDAY) and National CineMedia (NASDAQ:NCMI) are both small-cap communication services companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Institutional & Insider Ownership

76.7% of USA Today shares are owned by institutional investors. Comparatively, 69.5% of National CineMedia shares are owned by institutional investors. 4.4% of USA Today shares are owned by insiders. Comparatively, 1.7% of National CineMedia shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares USA Today and National CineMedia”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USA Today	$2.30 billion	0.41	$1.75 million	($0.30)	-21.33
National CineMedia	$249.00 million	0.94	-$10.60 million	($0.09)	-27.78

USA Today has higher revenue and earnings than National CineMedia. National CineMedia is trading at a lower price-to-earnings ratio than USA Today, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares USA Today and National CineMedia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
USA Today	-1.81%	-21.13%	-1.85%
National CineMedia	-3.05%	-1.31%	-0.99%

Analyst Recommendations

This is a summary of current ratings and recommmendations for USA Today and National CineMedia, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USA Today	1	1	2	0	2.25
National CineMedia	1	2	3	0	2.33

USA Today presently has a consensus price target of $9.03, suggesting a potential upside of 41.02%. National CineMedia has a consensus price target of $4.81, suggesting a potential upside of 92.50%. Given National CineMedia’s stronger consensus rating and higher possible upside, analysts clearly believe National CineMedia is more favorable than USA Today.

Risk & Volatility

USA Today has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, National CineMedia has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.

About USA Today

Gannett Co Inc. invests in, owns, and operates local media assets in the United States. The company’s principal products include 125 daily newspapers with total paid circulation of approximately 1.4 million; 314 weekly newspapers with total paid circulation of approximately 315,000 and total free circulation of approximately 1.9 million; 124 shoppers with total circulation of approximately 3.0 million; and 538 locally-focused Websites, including Internet and mobile devices with approximately 224 million page views per month. Its principal products also comprise 2 yellow page directories with a total distribution of approximately 230,000 that cover a population of approximately 411,000 people; 68 business publications; and Propel digital marketing and business services. In addition, the company produces niche publications that address specific local market interests, such as recreation, sports, healthcare, and real estate. Further, it provides print and online products that offer local market news and information on various topics comprising local news and politics, community and regional events, youth sports, opinion and editorial pages, local schools, obituaries, weddings, and police reports, as well as print and digital advertising products, as well as commercial printing and regional business-oriented publications services. The company reaches approximately 20 million people per week; and serves approximately 220,000 business customers. New Media Investment Group Inc. was founded in 1997 and is based in New York, New York.

About National CineMedia

National CineMedia, Inc., through its subsidiary, National CineMedia, LLC, operates cinema advertising network in North America. It engages in the sale of advertising to national, regional, and local businesses in Noovie, a cinema advertising and entertainment show seen on movie screens; and sells advertising on its Lobby Entertainment Network, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theatre lobbies. The company also sells online and mobile advertising through its Noovie Audience Accelerator product across a suite of Noovie digital properties, such as Name That Movie and Noovie Trivia app to reach entertainment audiences beyond the theater. It offers its services to third-party theater circuits under long-term network affiliate agreements. The company was incorporated in 2006 and is headquartered in Centennial, Colorado.