DreamWorks Animation (NASDAQ: DWA) and The Madison Square Garden (NYSE:MSG) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Volatility and Risk

DreamWorks Animation has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, The Madison Square Garden has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Insider and Institutional Ownership

87.8% of The Madison Square Garden shares are owned by institutional investors. 18.6% of The Madison Square Garden shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares DreamWorks Animation and The Madison Square Garden’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DreamWorks Animation N/A N/A N/A $0.63 65.03
The Madison Square Garden $1.32 billion 3.75 $55.74 million ($3.12) -67.42

The Madison Square Garden has higher revenue and earnings than DreamWorks Animation. The Madison Square Garden is trading at a lower price-to-earnings ratio than DreamWorks Animation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for DreamWorks Animation and The Madison Square Garden, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DreamWorks Animation 0 0 0 0 N/A
The Madison Square Garden 1 3 6 0 2.50

The Madison Square Garden has a consensus target price of $203.89, suggesting a potential downside of 3.08%. Given The Madison Square Garden’s higher possible upside, analysts clearly believe The Madison Square Garden is more favorable than DreamWorks Animation.

Profitability

This table compares DreamWorks Animation and The Madison Square Garden’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DreamWorks Animation 0.63% 0.80% 0.29%
The Madison Square Garden -5.52% -2.43% -1.68%

Summary

The Madison Square Garden beats DreamWorks Animation on 6 of the 10 factors compared between the two stocks.

DreamWorks Animation Company Profile

Dreamworks Animation, LLC (DreamWorks Animation), formerly DreamWorks Animation SKG, Inc., creates and exploits branded family entertainment, including animated feature films, television series and specials, live entertainment properties and related consumer products. The Company’s segments include Feature Films, Television Series and Specials, Consumer Products, New Media and All Other. The Company has released a total of over 30 animated feature films, including the franchise properties Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon.

The Madison Square Garden Company Profile

The Madison Square Garden Company is a holding company, which is engaged in live experiences consisting of celebrated venues, sports teams, and entertainment productions. The Company operates in two segments, which include MSG Entertainment and MSG Sports. The MSG Sports segment includes the Company’s professional sports franchises, which include the New York Knicks (the Knicks) of the National Basketball Association (the NBA), the New York Rangers (the Rangers) of the National Hockey League (the NHL), the New York Liberty (the Liberty) of the Women’s National Basketball Association (the WNBA), the Hartford Wolf Pack of the American Hockey League (the AHL), which is the primary player development team for the Rangers, and the Westchester Knicks, an NBA Development League team. The MSG Entertainment segment includes the Company’s live entertainment events. The Company presents or hosts live entertainment events, including concerts, family shows, performing arts and special events.

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