Is satellite TV the wave of the future? After all, it’s expensive to dig up the ground and put in cables — an especially important factor for emerging markets — and far cheaper to put a satellite dish in front of a house. A look at DirecTV (NASDAQ:DTV) and News Corp. (NASDAQ:NWSA) shows the satellite TV business is booming.

Prior to DirecTV’s Thursday morning third-quarter earnings report, analysts were expecting a big profit increase over the same period in 2010. Specifically, expectations were for EPS of 73 cents a share — up from 55 cents in 2010 — and an 11.7% sales increase to $6.74 billion.

But DTV’s actual results were a mixed bag. The good news is that DirecTV enjoyed faster-than-expected sales growth — up 14% to $6.84 billion. The bad news is that its 27% increase in EPS to 70 cents still fell three cents short of expectations.

Interestingly, its revenue growth benefited from new subscribers in emerging markets — Latin America set “records with 957,000 gross and 574,000 net additions in the quarter while Sky Mexico adds 238,000 net new subscribers,” according to DirecTV’s earnings press release.

Meanwhile, News Corp. — it does cable programming, newspapers, book publishing and films in addition to satellite TV — reported better-than-expected adjusted EPS on Tuesday night. While its first-quarter 2012 net income declined 5% thanks to the cost of closing News of the World and a dropped takeover bid for DirecTV competitor British Sky Broadcasting, News Corp.’s adjusted EPS was 32 cents per share — three cents more than Factset analysts had expected.

News Corp. boosted the performance of its Direct Broadcast Satellite Television unit. Specifically, it reported DBST revenue of $922 million — up 7.7% — and DBST operating income of $119 million — a 45% spike. In the quarter, DBST represented 12% of News Corp revenues and 8.6% of its operating income.

So are DTV and NWSA shares both worth buying? Definitely. Here’s why:

• DirecTV: Decent growth, good margins; cheap stock. DTV’s sales have increased 11.8% in the past 12 months to $25.57 billion, while net income soared 133.3% to $2.47 billion — yielding a 10.1% net profit margin. Its price/earnings-to-growth ratio of 0.58 (where a PEG of 1.0 is considered fairly priced) is very cheap on a P/E of 14.76 and expected earnings growth of 25.8% to $4.22 in 2012.
• News Corp.: Slow growth, small margins; cheap stock. NWSA’s sales have increased 1.9% in the past 12 months to $33.9 billion, while net income climbed 17.9% to $3 billion — yielding a 9.2% net profit margin. Its PEG ratio of 0.66 is very cheap on a P/E of 14.82 and expected earnings growth of 22.63% to $1.68 in fiscal 2013.

If forced to choose, I would pick DirecTV because of its greater exposure to the booming satellite TV market. But News Corp.’s stock looks cheap if it can keep beating expectations.

Peter Cohan has consulted to Rupert Murdoch. As of this writing, Cohan did not own a position in any of the aforementioned stocks.