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The Walt Disney Company (DIS), Time Warner Inc (TWX), News Corp (NWSA): 3 Big Leaders in the Media Industry

News Corp (NASDAQ:NWSA)’s vast library of movies and TV shows serve as a stabilizer for the company. Given the fact that the movie making business is quite volatile and unpredictable, the aforementioned products, that include “The Simpsons” among many others, should provide reassuring and steady annual cash flow.

A very attractive pick

Trading at 18.6 times trailing earnings, Time Warner Inc (NYSE:TWX) is even better valued than Disney. Dividend yield is also more attractive for investors at 1.87%. Whether it is a better investment or not still remains to be decided. However, I would certainly recommend buying this stock.

Despite posting flat revenue of $6.9 billion, first-quarter results still look encouraging as adjusted EPS grew 22% to $0.82 and so did the operating income, mainly bolstered by increased sales and operating profits in the cable network segment. In addition, shareholders have been rewarded by the repurchase of more than 25% of the firm’s outstanding shares since 2009 and about $870 million (1.3%), since the beginning of the year.

Its diversified and international product offerings provide plenty of growth opportunities for the future. It has strengthened its presence worldwide through its region-specific versions of CNN, Cartoon Network, and TNT, among others in over 180 countries. HBO is also part of Warner’s portfolio and leads in the premium TV segment. Incursions in the digital segment, like the HBO GO streaming initiative, will most likely help maintain this position.

This company does not only dominate in the multimedia sector. Among traditional media, Time, a Warner owned subsidiary company, is the largest magazine publisher in the U.S. based on advertising revenue (Publishers Information Bureau). Its movement into the digital business, bolstered by an agreement with Apple, will most certainly drive its profits in the near future.

Bottom line

When investing in media, there is more to look at than just the fundamentals and growth prospects. Any stockholder should be aware of the political, social, moral, and religious views defended and praised by these networks, as they play a crucial role in the creation and variations of public opinion and policy. However, in terms of investment basics, if looked through the same glass as any other company, my pick would be The Walt Disney Company (NYSE:DIS), due to its reasonable valuation and compelling growth prospects.

The article 3 Big Leaders in the Media Industry originally appeared on Fool.com and is written by Victor Selva.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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