National CineMedia (NASDAQ:NCMI – Get Free Report) and USA Today (NYSE:TDAY – Get Free Report) are both small-cap communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.
Insider and Institutional Ownership
69.5% of National CineMedia shares are held by institutional investors. Comparatively, 76.7% of USA Today shares are held by institutional investors. 1.7% of National CineMedia shares are held by company insiders. Comparatively, 4.4% of USA Today shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares National CineMedia and USA Today’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National CineMedia | -3.47% | -1.80% | -1.37% |
| USA Today | 1.27% | 21.75% | 2.09% |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National CineMedia | $242.30 million | 1.55 | -$10.60 million | ($0.09) | -44.56 |
| USA Today | $2.30 billion | 0.55 | $1.75 million | $0.06 | 145.00 |
USA Today has higher revenue and earnings than National CineMedia. National CineMedia is trading at a lower price-to-earnings ratio than USA Today, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations and price targets for National CineMedia and USA Today, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National CineMedia | 1 | 2 | 3 | 0 | 2.33 |
| USA Today | 1 | 0 | 3 | 0 | 2.50 |
National CineMedia presently has a consensus target price of $5.38, indicating a potential upside of 34.04%. USA Today has a consensus target price of $9.03, indicating a potential upside of 3.74%. Given National CineMedia’s higher probable upside, analysts clearly believe National CineMedia is more favorable than USA Today.
Risk & Volatility
National CineMedia has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, USA Today has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.
Summary
USA Today beats National CineMedia on 11 of the 13 factors compared between the two stocks.
About National CineMedia
National CineMedia, Inc., through its subsidiary, National CineMedia, LLC, operates cinema advertising network in North America. It engages in the sale of advertising to national, regional, and local businesses in Noovie, a cinema advertising and entertainment show seen on movie screens; and sells advertising on its Lobby Entertainment Network, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theatre lobbies. The company also sells online and mobile advertising through its Noovie Audience Accelerator product across a suite of Noovie digital properties, such as Name That Movie and Noovie Trivia app to reach entertainment audiences beyond the theater. It offers its services to third-party theater circuits under long-term network affiliate agreements. The company was incorporated in 2006 and is headquartered in Centennial, Colorado.
About USA Today
Gannett Co Inc. invests in, owns, and operates local media assets in the United States. The company’s principal products include 125 daily newspapers with total paid circulation of approximately 1.4 million; 314 weekly newspapers with total paid circulation of approximately 315,000 and total free circulation of approximately 1.9 million; 124 shoppers with total circulation of approximately 3.0 million; and 538 locally-focused Websites, including Internet and mobile devices with approximately 224 million page views per month. Its principal products also comprise 2 yellow page directories with a total distribution of approximately 230,000 that cover a population of approximately 411,000 people; 68 business publications; and Propel digital marketing and business services. In addition, the company produces niche publications that address specific local market interests, such as recreation, sports, healthcare, and real estate. Further, it provides print and online products that offer local market news and information on various topics comprising local news and politics, community and regional events, youth sports, opinion and editorial pages, local schools, obituaries, weddings, and police reports, as well as print and digital advertising products, as well as commercial printing and regional business-oriented publications services. The company reaches approximately 20 million people per week; and serves approximately 220,000 business customers. New Media Investment Group Inc. was founded in 1997 and is based in New York, New York.
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