Lions Gate Entertainment Corp. (NYSE: LGF) and Twenty-First Century Fox (NASDAQ:FOX) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings for Lions Gate Entertainment Corp. and Twenty-First Century Fox, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lions Gate Entertainment Corp. 0 1 15 0 2.94
Twenty-First Century Fox 0 1 1 0 2.50

Lions Gate Entertainment Corp. currently has a consensus target price of $31.63, indicating a potential upside of 21.22%. Twenty-First Century Fox has a consensus target price of $34.00, indicating a potential upside of 26.02%. Given Twenty-First Century Fox’s higher probable upside, analysts clearly believe Twenty-First Century Fox is more favorable than Lions Gate Entertainment Corp..

Dividends

Lions Gate Entertainment Corp. pays an annual dividend of $0.27 per share and has a dividend yield of 1.0%. Twenty-First Century Fox pays an annual dividend of $0.36 per share and has a dividend yield of 1.3%. 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. Twenty-First Century Fox pays out 22.6% of its earnings in the form of a dividend. Lions Gate Entertainment Corp. has raised its dividend for 2 consecutive years. Twenty-First Century Fox is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Lions Gate Entertainment Corp. and Twenty-First Century Fox’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lions Gate Entertainment Corp. 17.36% 26.35% 7.85%
Twenty-First Century Fox 10.36% 22.47% 7.20%

Valuation & Earnings

This table compares Lions Gate Entertainment Corp. and Twenty-First Century Fox’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lions Gate Entertainment Corp. N/A N/A N/A $0.22 118.60
Twenty-First Century Fox $28.50 billion 1.75 $7.11 billion $1.59 16.97

Twenty-First Century Fox has higher revenue and earnings than Lions Gate Entertainment Corp.. Twenty-First Century Fox 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.

Insider & Institutional Ownership

96.7% of Lions Gate Entertainment Corp. shares are owned by institutional investors. Comparatively, 23.3% of Twenty-First Century Fox shares are owned by institutional investors. 30.4% of Lions Gate Entertainment Corp. shares are owned by insiders. Comparatively, 39.4% of Twenty-First Century Fox shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Lions Gate Entertainment Corp. has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Twenty-First Century Fox has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Summary

Lions Gate Entertainment Corp. beats Twenty-First Century Fox on 8 of the 14 factors compared between the two stocks.

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.

Twenty-First Century Fox Company Profile

Twenty-First Century Fox, Inc. is a media and entertainment company. The Company’s segments include Cable Network Programming; Television; Filmed Entertainment, and Other, Corporate and Eliminations. The Cable Network Programming segment produces and licenses news, business news, sports, general entertainment, factual entertainment and movie programming for distribution. The Television segment is engaged in the operation of broadcast television stations and the broadcasting of network programming in the United States. The Filmed Entertainment segment is engaged in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media, and the production and licensing of television programming around the world. The Other, Corporate and Eliminations segment consists primarily of corporate overhead and eliminations, and other businesses.

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