Lions Gate Entertainment (NYSE: LGF) and DTS (NASDAQ:DTSI) are both cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.
Valuation and Earnings
This table compares Lions Gate Entertainment and DTS’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lions Gate Entertainment||N/A||N/A||N/A||$0.22||118.59|
DTS is trading at a lower price-to-earnings ratio than Lions Gate Entertainment, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Lions Gate Entertainment and DTS, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Lions Gate Entertainment||0||1||14||0||2.93|
Lions Gate Entertainment currently has a consensus price target of $32.62, suggesting a potential upside of 25.01%.
Insider & Institutional Ownership
96.7% of Lions Gate Entertainment shares are held by institutional investors. Comparatively, 98.1% of DTS shares are held by institutional investors. 30.4% of Lions Gate Entertainment shares are held by insiders. Comparatively, 11.3% of DTS shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Lions Gate Entertainment and DTS’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Lions Gate Entertainment||1.37%||2.22%||0.60%|
Lions Gate Entertainment pays an annual dividend of $0.27 per share and has a dividend yield of 1.0%. DTS pays an annual dividend of $0.08 per share. Lions Gate Entertainment pays out 122.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DTS pays out -19.0% of its earnings in the form of a dividend. Lions Gate Entertainment has increased its dividend for 2 consecutive years. Lions Gate Entertainment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Lions Gate Entertainment beats DTS on 8 of the 10 factors compared between the two stocks.
About Lions Gate Entertainment
Lions Gate Entertainment Corp. is engaged in motion picture production and distribution, television programming and syndication, home entertainment, international distribution and sales, branded channel platforms, interactive ventures and games and location-based entertainment. The Company operates through two segments: Motion Pictures and Television Production. The Company’s Motion Pictures segment consists of the development and production of feature films, acquisition of North American and around the world distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and around the world licensing of distribution rights to feature films produced and acquired. The Company’s Television Production segment consists of the development, production and around the world distribution of television productions, including television series, television movies, and mini-series and non-fiction programming.
DTS, Inc. is an audio technology solutions provider for high-definition entertainment experiences. The Company’s audio solutions are designed to enable recording, delivery and playback of high-definition audio, and are included by licensee customers around the world into a range of consumer electronics devices, including televisions, personal computers (PCs), smartphones, tablets, digital media players (DMPs), set-top-boxes, soundbars, wireless speakers, video game consoles, Blu-ray Disc players, automotive audio systems, audio/video receivers (AVRs), digital versatile disc (DVD)-based products and home theater systems. In the wireless speakers market, the Company maintains a Play-Fi Certified original design manufacturer (ODM) Program. The Company’s market base includes Blu-ray, Home audio video (AV) and Automotive. The Blu-ray market includes standalone players, gaming devices and disc drives included in PCs.
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