Critical Analysis: Eros International PLC (EROS) versus Viacom (VIAB)
Eros International PLC (NYSE: EROS) and Viacom (NASDAQ:VIAB) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.
Insider & Institutional Ownership
57.7% of Eros International PLC shares are owned by institutional investors. Comparatively, 78.8% of Viacom shares are owned by institutional investors. 0.4% of Viacom shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for Eros International PLC and Viacom, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Eros International PLC||0||0||2||0||3.00|
Eros International PLC presently has a consensus price target of $17.00, indicating a potential upside of 30.77%. Viacom has a consensus price target of $38.64, indicating a potential upside of 63.11%. Given Viacom’s higher possible upside, analysts clearly believe Viacom is more favorable than Eros International PLC.
Earnings and Valuation
This table compares Eros International PLC and Viacom’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Eros International PLC||$252.99 million||2.48||$3.80 million||$0.01||1,301.30|
|Viacom||$12.49 billion||0.76||$1.44 billion||$3.64||6.51|
Viacom has higher revenue and earnings than Eros International PLC. Viacom is trading at a lower price-to-earnings ratio than Eros International PLC, indicating that it is currently the more affordable of the two stocks.
Viacom pays an annual dividend of $0.80 per share and has a dividend yield of 3.4%. Eros International PLC does not pay a dividend. Viacom pays out 22.0% of its earnings in the form of a dividend.
Risk and Volatility
Eros International PLC has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Viacom has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500.
This table compares Eros International PLC and Viacom’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Eros International PLC||0.20%||0.03%||0.02%|
Viacom beats Eros International PLC on 12 of the 16 factors compared between the two stocks.
About Eros International PLC
Eros International Plc (Eros) is a holding company, which serves the Indian film entertainment industry. The Company’s principal activities include the acquisition, co-production and distribution of Indian films and related content. It distributes its film content through the distribution channels, such as theatrical, including multiplex chains and standalone theaters; television syndication, including satellite television broadcasting, cable television and terrestrial television; digital and ancillary, including music, inflight entertainment, home video, Internet protocol television (IPTV), video on demand (VOD), and Internet channels and Eros Now. As of March 31, 2016, its distribution network extends to over 50 countries, such as the United States, the United Kingdom, the Middle East, Germany, Poland, Russia, Romania, Indonesia and Arabic speaking countries. It conducts global operations through its Indian and international subsidiaries, including Eros International Media Limited.
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.
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