Analyzing AMC Entertainment (NYSE:AMC) & Carnival (NYSE:CUK)

AMC Entertainment (NYSE:AMC) and Carnival (NYSE:CUK) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Dividends

AMC Entertainment pays an annual dividend of $0.04 per share and has a dividend yield of 2.4%. Carnival pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. AMC Entertainment pays out -2.8% of its earnings in the form of a dividend. Carnival pays out 30.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. AMC Entertainment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares AMC Entertainment and Carnival”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AMC Entertainment	$4.87 billion	0.17	-$352.60 million	($1.41)	-1.16
Carnival	$26.62 billion	0.23	$2.76 billion	$2.00	15.93

Carnival has higher revenue and earnings than AMC Entertainment. AMC Entertainment is trading at a lower price-to-earnings ratio than Carnival, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for AMC Entertainment and Carnival, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AMC Entertainment	2	6	1	0	1.89
Carnival	0	1	0	0	2.00

AMC Entertainment presently has a consensus price target of $3.26, indicating a potential upside of 99.29%. Given AMC Entertainment’s higher probable upside, research analysts plainly believe AMC Entertainment is more favorable than Carnival.

Insider and Institutional Ownership

28.8% of AMC Entertainment shares are owned by institutional investors. Comparatively, 23.8% of Carnival shares are owned by institutional investors. 0.4% of AMC Entertainment shares are owned by insiders. Comparatively, 0.1% of Carnival shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares AMC Entertainment and Carnival’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AMC Entertainment	-13.16%	N/A	-5.27%
Carnival	10.37%	28.39%	6.09%

Volatility and Risk

AMC Entertainment has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Carnival has a beta of 2.54, suggesting that its share price is 154% more volatile than the S&P 500.

Summary

Carnival beats AMC Entertainment on 10 of the 16 factors compared between the two stocks.

About AMC Entertainment

AMC Entertainment Holdings, Inc., through its subsidiaries, engages in the theatrical exhibition business. It owns, operates, or has interests in theatres in the United States and Europe. The company was founded in 1920 and is headquartered in Leawood, Kansas.

About Carnival

Carnival Plc operates as a global cruise and vacation company. The firm offers holiday and vacation products to a customer base that is broadly varied in terms of cultures, languages and leisure-time preferences. It operates through the North America and Australia (NAA), Europe and Asia (EA), Cruise Support, and Tour and Other segments. The NAA segment includes Carnival Cruise Line, Holland America Line, P and O Cruises (Australia), Princess and Seabourn. The EA segment includes AIDA, Costa, Cunard, and P and O Cruises (UK). The Cruise Support segment includes a portfolio of port destinations and other services, all of which are operated for the benefit of cruise brands. The Tour and Other segment represents the hotel and transportation operations of Holland America Princess Alaska Tours and other operations. The company was founded on July 19, 2000 and is headquartered in Southampton, the United Kingdom.