Lions Gate Entertainment Corp. (LGF) versus Viacom (VIA) Critical Review
Viacom (NASDAQ: VIA) and Lions Gate Entertainment Corp. (NYSE:LGF) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitabiliy, analyst recommendations and institutional ownership.
Risk and Volatility
Viacom has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Lions Gate Entertainment Corp. has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.
Valuation & Earnings
This table compares Viacom and Lions Gate Entertainment Corp.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Viacom||$12.91 billion||1.22||$2.89 billion||$3.03||12.95|
|Lions Gate Entertainment Corp.||N/A||N/A||N/A||$0.22||118.60|
Viacom has higher revenue and earnings than Lions Gate Entertainment Corp.. Viacom is trading at a lower price-to-earnings ratio than Lions Gate Entertainment Corp., indicating that it is currently the more affordable of the two stocks.
This table compares Viacom and Lions Gate Entertainment Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Lions Gate Entertainment Corp.||4.89%||10.25%||2.66%|
Insider & Institutional Ownership
1.9% of Viacom shares are held by institutional investors. Comparatively, 96.7% of Lions Gate Entertainment Corp. shares are held by institutional investors. 0.7% of Viacom shares are held by insiders. Comparatively, 30.4% of Lions Gate Entertainment Corp. shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a summary of current ratings and target prices for Viacom and Lions Gate Entertainment Corp., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Lions Gate Entertainment Corp.||0||0||17||0||3.00|
Viacom presently has a consensus target price of $43.33, indicating a potential upside of 10.40%. Lions Gate Entertainment Corp. has a consensus target price of $30.25, indicating a potential upside of 15.94%. Given Lions Gate Entertainment Corp.’s stronger consensus rating and higher probable upside, analysts clearly believe Lions Gate Entertainment Corp. is more favorable than Viacom.
Viacom pays an annual dividend of $0.80 per share and has a dividend yield of 2.0%. Lions Gate Entertainment Corp. pays an annual dividend of $0.27 per share and has a dividend yield of 1.0%. Viacom pays out 26.4% of its earnings in the form of a dividend. Lions Gate Entertainment Corp. 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. Viacom has raised its dividend for 2 consecutive years. Viacom is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Viacom beats Lions Gate Entertainment Corp. on 9 of the 14 factors compared between the two stocks.
Viacom Company Profile
Viacom Inc. offers global media brands that create television programs, motion pictures, short-form content, applications, games, consumer products, social media experiences and other entertainment content. As of September 30, 2016, the Company offered its services for audiences in more than 180 countries. The Company operates through two segments: Media Networks and Filmed Entertainment. The Media Networks segment creates, acquires and distributes programming and other content for audiences The Media Networks segment provides entertainment content and related branded products for advertisers, content distributors and retailers. The Filmed Entertainment segment produces, finances, acquires and distributes motion pictures, television programming and other entertainment content under the Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Animation, Insurge Pictures, Nickelodeon Movies, MTV Films and Paramount Television brands.
Lions Gate Entertainment Corp. Company Profile
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.
Receive News & Stock Ratings for Viacom Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Viacom Inc. and related stocks with our FREE daily email newsletter.