Head-To-Head Analysis: Electronic Arts (NASDAQ:EA) versus Reading International (NASDAQ:RDIB)

Reading International (NASDAQ:RDIB) and Electronic Arts (NASDAQ:EA) are both communication services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider and Institutional Ownership

0.4% of Reading International shares are held by institutional investors. Comparatively, 90.2% of Electronic Arts shares are held by institutional investors. 5.4% of Reading International shares are held by company insiders. Comparatively, 0.2% of Electronic Arts shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Reading International and Electronic Arts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reading International	N/A	N/A	N/A
Electronic Arts	13.80%	22.45%	11.48%

Valuation and Earnings

This table compares Reading International and Electronic Arts”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reading International	$214.46 million	N/A	N/A	($0.20)	-73.62
Electronic Arts	$7.53 billion	7.03	$887.00 million	$3.49	60.09

Electronic Arts has higher revenue and earnings than Reading International. Reading International is trading at a lower price-to-earnings ratio than Electronic Arts, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Reading International and Electronic Arts, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reading International	1	0	0	0	1.00
Electronic Arts	2	13	1	0	1.94

Electronic Arts has a consensus target price of $206.50, suggesting a potential downside of 1.53%. Given Electronic Arts’ stronger consensus rating and higher probable upside, analysts clearly believe Electronic Arts is more favorable than Reading International.

Summary

Electronic Arts beats Reading International on 10 of the 11 factors compared between the two stocks.

About Reading International

Reading International, Inc. is an entertainment and real estate company, which engages in the development, ownership, and operation of multiplex cinemas and retail and commercial real estate in the United States, Australia, and New Zealand. It operates through the Cinema Exhibition and Real Estate segments. The Cinema Exhibition segment includes Reading Cinemas, Angelika Film Center, Consolidated Theatres, City Cinemas, 44 Union Square, and Liberty Theatres brands. The Real Estate segment comprises real estate development and the rental or licensing of retail, commercial and live theater assets. The company was founded by James J. Cotter Sr. in 1999 and is headquartered in Culver City, CA.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and license games from others, including FIFA, Madden NFL, UFC, and Star Wars brands. The company licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, California.