DTS (NASDAQ: DTSI) and Function(x) (NASDAQ:FNCX) are both cyclical consumer goods & services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitabiliy, valuation, dividends, earnings and risk.

Risk & Volatility

DTS has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Function(x) has a beta of -0.62, meaning that its share price is 162% less volatile than the S&P 500.

Valuation and Earnings

This table compares DTS and Function(x)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DTS N/A N/A N/A ($0.42) -101.09
Function(x) $3.13 million 0.23 -$10.43 million N/A N/A

DTS has higher revenue, but lower earnings than Function(x).

Insider & Institutional Ownership

98.1% of DTS shares are owned by institutional investors. Comparatively, 1.6% of Function(x) shares are owned by institutional investors. 11.3% of DTS shares are owned by company insiders. Comparatively, 66.9% of Function(x) shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

DTS pays an annual dividend of $0.08 per share and has a dividend yield of 0.2%. Function(x) does not pay a dividend. DTS pays out -19.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for DTS and Function(x), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DTS 0 5 0 0 2.00
Function(x) 0 0 0 0 N/A

DTS presently has a consensus target price of $37.88, suggesting a potential downside of 10.80%. Given DTS’s higher probable upside, equities research analysts plainly believe DTS is more favorable than Function(x).

Profitability

This table compares DTS and Function(x)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DTS 1.17% 1.04% 0.59%
Function(x) N/A N/A -48.16%

Summary

DTS beats Function(x) on 8 of the 10 factors compared between the two stocks.

DTS Company Profile

DTS, Inc. is an audio technology solutions provider for high-definition entertainment experiences. The Company’s audio solutions are designed to enable recording, delivery and playback of high-definition audio, and are included by licensee customers around the world into a range of consumer electronics devices, including televisions, personal computers (PCs), smartphones, tablets, digital media players (DMPs), set-top-boxes, soundbars, wireless speakers, video game consoles, Blu-ray Disc players, automotive audio systems, audio/video receivers (AVRs), digital versatile disc (DVD)-based products and home theater systems. In the wireless speakers market, the Company maintains a Play-Fi Certified original design manufacturer (ODM) Program. The Company’s market base includes Blu-ray, Home audio video (AV) and Automotive. The Blu-ray market includes standalone players, gaming devices and disc drives included in PCs.

Function(x) Company Profile

Function(x) Inc., formerly DraftDay Fantasy Sports, Inc., is a diversified media and entertainment company. The Company conducts three lines of businesses, which are digital publishing through Wetpaint.com, Inc. (Wetpaint) and Rant, Inc. (Rant); fantasy sports gaming through DraftDay Gaming Group, Inc. (DDGG), and digital content distribution through Choose Digital, Inc. (Choose Digital). The Company’s segments include Wetpaint, which is a media channel reporting original news stories and publishing information content covering television shows, music, celebrities, entertainment news and fashion; Choose Digital, which is a business-to-business platform for delivering digital content; DDGG, which is a business-to-business operator of daily fantasy sports, and Other. The Company’s digital publishing business also includes Rant, which is a digital publisher that publishes original content in over 13 verticals, such as in sports, entertainment, pets, cars and food.

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