We have a few impressive companies in the FTSE 100 covered by the less-than-exciting umbrella of media. And all of them have beaten the index over the past five years in fact, some have stomped it into the ground.
Telly
Take satellite TV operator British Sky Broadcasting (LSE: BSY), whose shares are up more than 60% over five years to 879p after year-on-year growth in earnings, compared to the 37% managed by the FTSE.
Thats nice, but its nothing compared to good old ITV (LSE: ITV), whose shares are up 300% over the same period to 216p after the company revamped itself and brought home increasingly strong profits.
Publishing
Educational publisher Pearson (LSE: PSON) saw a sharp price drop early this year after a profit warning preceded weaker-than-expected first-half results. But at 1,136p, the shares are still up more than 50% over five years.
Anglo-Dutch multinational publisher Reed Elsevier (LSE: REL) is perhaps not hot on many peoples lips. But its share price has soared since mid-2012 to 993p today, more than doubling over five years.
Advertising
And finally, we have advertising giant WPP (LSE: WPP), with the second-best price performance of the five up 135% to 1,274p, and with a solid track record of earnings and dividend growth.
Heres how they compare:
| British Sky Broadcasting |
ITV | Pearson | Reed Elsevier | WPP | |
|---|---|---|---|---|---|
| Market cap | 15.2bn | 8.8bn | 9.2bn | 11.3bn | 17.1bn |
| Year ended | Jun 2014 |
Dec 2013 | Dec 2013 | Dec 2013 | Dec 2013 |
| EPS change | 0% | +23% | -15% | +9% | +8% |
| P/E | 15.1 | 17.3 | 19.1 | 16.6 | 16.4 |
| Dividend Yield | 3.5% | 1.8% | 3.6% | 2.7% | 2.5% |
| Dividend Cover | 1.88x | 3.20x | 1.46x | 2.20x | 2.46x |
| Year ending* | Jun 2015 |
Dec 2014 | Dec 2014 | Dec 2014 | Dec 2014 |
| EPS change | +4% | +16% | -8% | +4% | -1% |
| P/E | 14.1 | 16.8 | 17.4 | 17.5 | 15.6 |
| Dividend Yield | 3.9% | 2.0% | 4.5% | 2.7% | 2.9% |
| Dividend Cover | 1.84x | 3.00x | 1.28x | 2.13x | 2.24x |
| Year ending* | Jun 2016 |
Dec 2015 | Dec 2015 | Dec 2015 | Dec 2015 |
| EPS change | +10% | +11% | +16% | +6% | +10% |
| P/E | 12.6 | 15.1 | 15.0 | 16.5 | 14.1 |
| Dividend Yield | 4.1% | 2.3% | 4.7% | 2.8% | 3.2% |
| Dividend Cover |
1.92x | 2.81x | 1.42x | 2.13x | 2.19x |
* forecast
After such impressive price rises, were really not looking at bargain-basement P/E ratios or stunning dividend yields here.
Which is best?
The question is which, if any, are good prospects now?
Ive always admired WPP over the years. It hasnt paid market-busting dividends, but theyve been solid. The shares have been more volatile than the FTSE and dipped a bit lower during the crunch, so if that worries you then it might not be your choice but the upside has been much better than the downside.
Im also impressed by ITVs storming performance over the past couple of years, but Im not sure how much longer it can keep up with the double-digit growth. And dividend yields arent great although theyre the best covered of the lot.
Skys the one
But I have to say, at the moment I think Sky is looking the best value. We had a flat year of earnings in the year to June 2014 and theres only a 4% rise forecast for the current year, and thats probably taken the edge of investors appetite. But a stronger 10% EPS rise predicted for 2016 would make the valuation look attractive, especially with dividend yields of around 4%.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended British Sky Broadcasting. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
