Analyzing Optimum Communications (NYSE:OPTU) & National CineMedia (NASDAQ:NCMI)

National CineMedia (NASDAQ:NCMI) and Optimum Communications (NYSE:OPTU) are both small-cap communication services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Profitability

This table compares National CineMedia and Optimum Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National CineMedia	-3.05%	-1.31%	-0.99%
Optimum Communications	-58.15%	N/A	-0.70%

Volatility & Risk

National CineMedia has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500. Comparatively, Optimum Communications has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for National CineMedia and Optimum Communications, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National CineMedia	1	2	3	0	2.33
Optimum Communications	4	5	0	0	1.56

National CineMedia currently has a consensus price target of $4.20, indicating a potential upside of 165.82%. Optimum Communications has a consensus price target of $0.92, indicating a potential upside of 22.08%. Given National CineMedia’s stronger consensus rating and higher possible upside, equities analysts clearly believe National CineMedia is more favorable than Optimum Communications.

Insider and Institutional Ownership

69.5% of National CineMedia shares are held by institutional investors. Comparatively, 54.8% of Optimum Communications shares are held by institutional investors. 1.7% of National CineMedia shares are held by company insiders. Comparatively, 43.4% of Optimum Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares National CineMedia and Optimum Communications”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National CineMedia	$243.20 million	0.61	-$10.60 million	($0.09)	-17.56
Optimum Communications	$8.59 billion	0.02	-$1.87 billion	($10.39)	-0.07

National CineMedia has higher earnings, but lower revenue than Optimum Communications. National CineMedia is trading at a lower price-to-earnings ratio than Optimum Communications, indicating that it is currently the more affordable of the two stocks.

Summary

National CineMedia beats Optimum Communications on 9 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 Optimum Communications

Altice USA, Inc., together with its subsidiaries, provides broadband communications and video services in the United States, Canada, Puerto Rico, and the Virgin Islands. It offers broadband, video, telephony, and mobile services to approximately five million residential and business customers. The company’s video services include delivery of broadcast stations and cable networks; over the top services; video-on-demand, high-definition channels, digital video recorder, and pay-per-view services; and platforms for video programming through mobile applications. It also provides voice over Internet protocol telephone services; and mobile services, such as data, talk, and text. In addition, the company offers Ethernet, data transport, IP-based virtual private networks, Internet access, and telephony services; hosted telephony services, managed Wi-Fi, managed desktop and server backup, and collaboration services comprising audio and web conferencing; fiber-to-the-tower services to wireless carriers; data services consisting of wide area networking and dedicated data access, as well as wireless mesh networks; and enterprise class telephone services that include traditional multi-line phone service. Further, it provides business e-mail, hosted private branch exchange, web space storage, and network security monitoring; and international calling and toll free numbers. Additionally, the company offers audience-based and IP-authenticated cross-screen advertising solutions; and television and digital advertising services, as well as operates news channels under the News 12 Networks, Cheddar, and i24NEWS names. It also provides broadband communications and video services under the Optimum and Suddenlink brands. The company was incorporated in 2015 and is headquartered in Long Island City, New York. Altice USA, Inc. is a subsidiary of Next Alt. S.a.r.l.