NEWS CORP - CLASS B (NWS) Stock Fundamental Analysis
NASDAQ:NWS - Nasdaq - US65249B2088 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to NWS. NWS was compared to 96 industry peers in the Media industry. NWS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NWS is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year NWS was profitable.
NWS had a positive operating cash flow in the past year.
NWS had positive earnings in 4 of the past 5 years.
NWS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.56%, NWS is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
NWS's Return On Equity of 5.08% is fine compared to the rest of the industry. NWS outperforms 69.79% of its industry peers.
NWS has a Return On Invested Capital of 4.36%. This is in the better half of the industry: NWS outperforms 61.46% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NWS is below the industry average of 6.73%.
The 3 year average ROIC (3.62%) for NWS is below the current ROIC(4.36%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.56% | ||
| ROE | 5.08% | ||
| ROIC | 4.36% |
ROA(3y)2.03%
ROA(5y)-0.17%
ROE(3y)4.23%
ROE(5y)0%
ROIC(3y)3.62%
ROIC(5y)3.12%
1.3 Margins
NWS has a Profit Margin of 4.22%. This is in the better half of the industry: NWS outperforms 76.04% of its industry peers.
NWS's Profit Margin has improved in the last couple of years.
NWS's Operating Margin of 9.10% is fine compared to the rest of the industry. NWS outperforms 63.54% of its industry peers.
In the last couple of years the Operating Margin of NWS has grown nicely.
The Gross Margin of NWS (51.86%) is better than 64.58% of its industry peers.
In the last couple of years the Gross Margin of NWS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.1% | ||
| PM (TTM) | 4.22% | ||
| GM | 51.86% |
OM growth 3Y5.19%
OM growth 5Y5.3%
PM growth 3Y-9.23%
PM growth 5Y11.38%
GM growth 3Y1%
GM growth 5Y2.67%
2. Health
2.1 Basic Checks
NWS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, NWS has less shares outstanding
NWS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, NWS has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.25 indicates that NWS is not a great score, but indicates only limited risk for bankruptcy at the moment.
NWS's Altman-Z score of 2.25 is fine compared to the rest of the industry. NWS outperforms 72.92% of its industry peers.
NWS has a debt to FCF ratio of 2.64. This is a good value and a sign of high solvency as NWS would need 2.64 years to pay back of all of its debts.
NWS has a better Debt to FCF ratio (2.64) than 85.42% of its industry peers.
NWS has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.24, NWS is doing good in the industry, outperforming 70.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 2.64 | ||
| Altman-Z | 2.25 |
ROIC/WACC0.52
WACC8.32%
2.3 Liquidity
NWS has a Current Ratio of 1.73. This is a normal value and indicates that NWS is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of NWS (1.73) is better than 66.67% of its industry peers.
NWS has a Quick Ratio of 1.65. This is a normal value and indicates that NWS is financially healthy and should not expect problems in meeting its short term obligations.
NWS has a Quick ratio of 1.65. This is in the better half of the industry: NWS outperforms 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.73 | ||
| Quick Ratio | 1.65 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 31.34% over the past year.
Measured over the past years, NWS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.76% on average per year.
Looking at the last year, NWS shows a small growth in Revenue. The Revenue has grown by 2.09% in the last year.
NWS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.02% yearly.
EPS 1Y (TTM)31.34%
EPS 3Y1.47%
EPS 5Y8.76%
EPS Q2Q%54.55%
Revenue 1Y (TTM)2.09%
Revenue growth 3Y2.53%
Revenue growth 5Y0.02%
Sales Q2Q%-17.09%
3.2 Future
NWS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.10% yearly.
NWS is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.49% yearly.
EPS Next Y30.85%
EPS Next 2Y24.67%
EPS Next 3Y20.54%
EPS Next 5Y13.1%
Revenue Next Year-13.01%
Revenue Next 2Y-6.59%
Revenue Next 3Y-3.33%
Revenue Next 5Y-0.49%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 36.76, NWS can be considered very expensive at the moment.
NWS's Price/Earnings ratio is a bit cheaper when compared to the industry. NWS is cheaper than 60.42% of the companies in the same industry.
NWS is valuated rather expensively when we compare the Price/Earnings ratio to 26.03, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 29.73, which means the current valuation is very expensive for NWS.
The rest of the industry has a similar Price/Forward Earnings ratio as NWS.
The average S&P500 Price/Forward Earnings ratio is at 21.94. NWS is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.76 | ||
| Fwd PE | 29.73 |
4.2 Price Multiples
NWS's Enterprise Value to EBITDA ratio is in line with the industry average.
NWS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.67 | ||
| EV/EBITDA | 12.53 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
NWS has a very decent profitability rating, which may justify a higher PE ratio.
NWS's earnings are expected to grow with 20.54% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.19
PEG (5Y)4.2
EPS Next 2Y24.67%
EPS Next 3Y20.54%
5. Dividend
5.1 Amount
With a yearly dividend of 0.71%, NWS is not a good candidate for dividend investing.
NWS's Dividend Yield is a higher than the industry average which is at 4.91.
With a Dividend Yield of 0.71, NWS pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
5.2 History
The dividend of NWS has a limited annual growth rate of 1.81%.
NWS has been paying a dividend for at least 10 years, so it has a reliable track record.
NWS has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)1.81%
Div Incr Years0
Div Non Decr Years9
5.3 Sustainability
NWS pays out 43.24% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of NWS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP43.24%
EPS Next 2Y24.67%
EPS Next 3Y20.54%
32.35
-0.43 (-1.31%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners102.44%
Inst Owner Change-1.42%
Ins Owners0.03%
Ins Owner Change0%
Market Cap18.36B
Analysts82.5
Price Target42.76 (32.18%)
Short Float %1.65%
Short Ratio7.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
Yearly Dividend0.3
Dividend Growth(5Y)1.81%
DP43.24%
Div Incr Years0
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)15.23%
Min EPS beat(2)3.18%
Max EPS beat(2)27.28%
EPS beat(4)4
Avg EPS beat(4)10.38%
Min EPS beat(4)3.18%
Max EPS beat(4)27.28%
EPS beat(8)8
Avg EPS beat(8)34.78%
EPS beat(12)10
Avg EPS beat(12)58.01%
EPS beat(16)14
Avg EPS beat(16)71.9%
Revenue beat(2)1
Avg Revenue beat(2)-1.27%
Min Revenue beat(2)-2.91%
Max Revenue beat(2)0.36%
Revenue beat(4)2
Avg Revenue beat(4)-1.03%
Min Revenue beat(4)-3.16%
Max Revenue beat(4)1.58%
Revenue beat(8)3
Avg Revenue beat(8)-1.05%
Revenue beat(12)4
Avg Revenue beat(12)-1.22%
Revenue beat(16)8
Avg Revenue beat(16)0.24%
PT rev (1m)3.37%
PT rev (3m)6.68%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-13.85%
EPS NY rev (1m)0%
EPS NY rev (3m)-5.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.63%
Revenue NY rev (1m)0.32%
Revenue NY rev (3m)-2.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.76 | ||
| Fwd PE | 29.73 | ||
| P/S | 1.87 | ||
| P/FCF | 24.67 | ||
| P/OCF | 15.81 | ||
| P/B | 2.25 | ||
| P/tB | 9.22 | ||
| EV/EBITDA | 12.53 |
EPS(TTM)0.88
EY2.72%
EPS(NY)1.09
Fwd EY3.36%
FCF(TTM)1.31
FCFY4.05%
OCF(TTM)2.05
OCFY6.33%
SpS17.3
BVpS14.36
TBVpS3.51
PEG (NY)1.19
PEG (5Y)4.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.56% | ||
| ROE | 5.08% | ||
| ROCE | 7.18% | ||
| ROIC | 4.36% | ||
| ROICexc | 5.08% | ||
| ROICexgc | 12% | ||
| OM | 9.1% | ||
| PM (TTM) | 4.22% | ||
| GM | 51.86% | ||
| FCFM | 7.58% |
ROA(3y)2.03%
ROA(5y)-0.17%
ROE(3y)4.23%
ROE(5y)0%
ROIC(3y)3.62%
ROIC(5y)3.12%
ROICexc(3y)4.19%
ROICexc(5y)3.63%
ROICexgc(3y)11.93%
ROICexgc(5y)9.92%
ROCE(3y)5.95%
ROCE(5y)5.14%
ROICexcg growth 3Y10.45%
ROICexcg growth 5Y-0.35%
ROICexc growth 3Y6.7%
ROICexc growth 5Y3.57%
OM growth 3Y5.19%
OM growth 5Y5.3%
PM growth 3Y-9.23%
PM growth 5Y11.38%
GM growth 3Y1%
GM growth 5Y2.67%
F-Score9
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 2.64 | ||
| Debt/EBITDA | 1.3 | ||
| Cap/Depr | 68.47% | ||
| Cap/Sales | 4.25% | ||
| Interest Coverage | 5.88 | ||
| Cash Conversion | 77.3% | ||
| Profit Quality | 179.71% | ||
| Current Ratio | 1.73 | ||
| Quick Ratio | 1.65 | ||
| Altman-Z | 2.25 |
F-Score9
WACC8.32%
ROIC/WACC0.52
Cap/Depr(3y)70%
Cap/Depr(5y)67.07%
Cap/Sales(3y)4.92%
Cap/Sales(5y)4.76%
Profit Quality(3y)253.85%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)31.34%
EPS 3Y1.47%
EPS 5Y8.76%
EPS Q2Q%54.55%
EPS Next Y30.85%
EPS Next 2Y24.67%
EPS Next 3Y20.54%
EPS Next 5Y13.1%
Revenue 1Y (TTM)2.09%
Revenue growth 3Y2.53%
Revenue growth 5Y0.02%
Sales Q2Q%-17.09%
Revenue Next Year-13.01%
Revenue Next 2Y-6.59%
Revenue Next 3Y-3.33%
Revenue Next 5Y-0.49%
EBIT growth 1Y12.33%
EBIT growth 3Y7.85%
EBIT growth 5Y5.33%
EBIT Next Year79.48%
EBIT Next 3Y27.15%
EBIT Next 5Y19.52%
FCF growth 1Y28.5%
FCF growth 3Y-10.76%
FCF growth 5Y11.08%
OCF growth 1Y7%
OCF growth 3Y-3.9%
OCF growth 5Y3.42%