Head to Head Contrast: Discovery (NASDAQ:DISCB) and Lionsgate (LGF.B)

Lionsgate (NYSE: LGF.B) and Discovery (NASDAQ:DISCB) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Dividends

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Lionsgate pays an annual dividend of $0.36 per share and has a dividend yield of 1.5%. Discovery does not pay a dividend.

Risk & Volatility

Lionsgate has a beta of 1.74, suggesting that its share price is 74% more volatile than the S&P 500. Comparatively, Discovery has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500.

Insider and Institutional Ownership

83.8% of Lionsgate shares are owned by institutional investors. Comparatively, 0.0% of Discovery shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Lionsgate and Discovery’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lionsgate 10.22% 9.59% 2.85%
Discovery -4.90% 21.68% 5.92%

Earnings & Valuation

This table compares Lionsgate and Discovery’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lionsgate $3.20 billion 0.96 $14.80 million N/A N/A
Discovery $6.87 billion 2.11 -$337.00 million N/A N/A

Lionsgate has higher earnings, but lower revenue than Discovery.

Analyst Recommendations

This is a summary of current recommendations for Lionsgate and Discovery, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lionsgate 0 2 4 0 2.67
Discovery 0 0 0 0 N/A

Lionsgate presently has a consensus target price of $32.50, suggesting a potential upside of 36.10%. Given Lionsgate’s higher probable upside, research analysts clearly believe Lionsgate is more favorable than Discovery.

Summary

Lionsgate beats Discovery on 7 of the 12 factors compared between the two stocks.

About Discovery

Discovery Communications, Inc. (Discovery) is a global media company. The Company provides content across multiple distribution platforms, including pay-television (pay-TV), free-to-air (FTA) and broadcast television, Websites, digital distribution arrangements and content licensing agreements. Its segments include U.S. Networks, which consists principally of domestic television networks and digital content services; International Networks, consisting primarily of international television networks and digital content services, and Education and Other, which consists principally of curriculum-based product and service offerings, and production studios. The Company’s portfolio of networks includes television brands, such as Discovery Channel, Animal Planet, ID, Velocity (known as Turbo outside of the United States) and Eurosport. It is also engaged in extending content distribution across various platforms, including brand-aligned Websites, Web-native networks and online streaming.

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