Thomson, DreamWorks: Best Media Stocks

BOSTON (TheStreet) -- TheStreet's equity model, which ranks stocks based on fundamentals and performance, considers the following five media companies the best in the industry.

5. Thomson-Reuters ( TRI) sells data.

The numbers: Fourth-quarter profit plummeted 73% to $177 million, or 21 cents a share, as revenue declined 1.6% to $3.4 billion. The operating margin narrowed from 24% to 15%. Thomson holds $1.1 billion of cash and $7.6 billion of debt.

The stock: Thomson-Reuters has advanced 52% over the past year, trailing major U.S. indices. The stock trades at a price-to-book ratio of 1.5, a discount to media peers. The shares offer a 3.2% dividend yield with an excessive payout ratio of 113%.

4. John Wiley & Sons ( JW.A) publishes print and electronic publications.

The numbers: Fiscal second-quarter profit increased 15% to $46 million, or 78 cents a share, as revenue grew 3.7% to $448 million. The operating margin expanded from 16% to 19%. John Wiley & Sons holds $61 million of cash and $853 million of debt.

The stock: John Wiley & Sons has increased 43% during the past 12 months, lagging behind U.S. benchmarks. The stock trades at a price-to-projected-earnings ratio of 15, on par with competitors' shares. It is cheap based on sales and cash flow.

3. DreamWorks Animation ( DWA) makes computer-generated films.

The numbers: Fourth-quarter profit dropped 16% to $44 million, or 50 cents a share, as revenue declined 2.8% to $194 million. The operating margin widened from 27% to 28%. The balance sheet contains $231 million of cash and no debt.

The stock: DreamWorks has soared 131% in the past year, beating U.S. indices. The stock trades at a price-to-projected-earnings ratio of 16, on par with peers. Its PEG ratio, a measure of value relative to growth, of 0.5 represents a 55% discount to the industry average. A PEG ratio below 1 implies cheap shares.

2. Interactive Data ( IDC) sells financial-market data and analytics.

The numbers: Fourth-quarter profit decreased 18% to $33 million, or 34 cents a share, as revenue remained flat at $194 million. The operating margin contracted from 29% to 24%. Interactive Data holds $306 million of cash and no debt.

The stock: Interactive Data has risen 41% over the past 52 weeks, underperforming benchmarks. The stock trades at a price-to-projected-earnings ratio of 19, a premium to competitors. It is cheap when comparing book value metrics.

1. Daily Journal Corp. ( DJCO) sells profession-oriented newspapers.

The numbers: Fiscal first-quarter profit rose 19% to $2.1 million, or $1.51 a share, as revenue inched up 0.5% to $9.9 million. Daily Journal's operating margin extended from 28% to 32%. Its balance sheet stores $64 million of cash and no debt.

The stock: Daily Journal has increased 80% over the past year, outperforming major indices. The stock trades at a price-to-earnings ratio of 11 and a price-to-book ratio of 1.6, a 46% and 56% discount to respective peer-group averages.

-- Reported by Jake Lynch in Boston.

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