Carmike Cinemas (NASDAQ: CKEC) and Cinemark Holdings (NYSE:CNK) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitabiliy, institutional ownership, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations and price targets for Carmike Cinemas and Cinemark Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carmike Cinemas 0 2 0 0 2.00
Cinemark Holdings 3 6 4 0 2.08

Carmike Cinemas currently has a consensus price target of $32.88, indicating a potential downside of 1.57%. Cinemark Holdings has a consensus price target of $43.57, indicating a potential upside of 13.41%. Given Cinemark Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Cinemark Holdings is more favorable than Carmike Cinemas.

Dividends

Cinemark Holdings pays an annual dividend of $1.16 per share and has a dividend yield of 3.0%. Carmike Cinemas does not pay a dividend. Cinemark Holdings pays out 49.2% of its earnings in the form of a dividend.

Profitability

This table compares Carmike Cinemas and Cinemark Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carmike Cinemas -1.56% -1.97% -1.44%
Cinemark Holdings 9.23% 21.75% 6.42%

Earnings and Valuation

This table compares Carmike Cinemas and Cinemark Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carmike Cinemas N/A N/A N/A $0.23 145.22
Cinemark Holdings $2.99 billion 1.49 $682.09 million $2.36 16.28

Cinemark Holdings has higher revenue and earnings than Carmike Cinemas. Cinemark Holdings is trading at a lower price-to-earnings ratio than Carmike Cinemas, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

87.5% of Carmike Cinemas shares are held by institutional investors. Comparatively, 89.4% of Cinemark Holdings shares are held by institutional investors. 5.6% of Carmike Cinemas shares are held by company insiders. Comparatively, 9.2% of Cinemark Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Carmike Cinemas has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, Cinemark Holdings has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Summary

Cinemark Holdings beats Carmike Cinemas on 11 of the 13 factors compared between the two stocks.

About Carmike Cinemas

Carmike Cinemas, Inc. is a motion picture exhibitor company. The Company owns and operates theatres and screens. Its theatres are equipped to provide digital cinema. It owns, operates or has an interest in approximately 280 theatres with over 2,940 screens located in over 40 states. In addition, it has approximately 260 theatres with over 1,090 screens equipped for three dimension (3-D). It operates approximately 20 theatres with over 110 screens as discount theatres. It operates approximately 50 premium large-format auditoriums, which operate under the Big D, IMAX and MuviXL names. Big D auditoriums include wall to wall screens, approximately 7.1 surround sound and digital projection for both two dimensional (2-D) and 3-D features. The Company operates a family entertainment center under the name Hollywood Connection, which features a multiplex theatre and other forms of family entertainment. The Company also operates over two Bogart’s Bar and Grill Restaurants.

About Cinemark Holdings

Cinemark Holdings, Inc. is engaged in the motion picture exhibition business with theatres in the United States (U.S.), Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Paraguay, Curacao and Bolivia. The Company manages its business in two segments: U.S. markets and international markets. The international segment consists of operations in Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. As of December 31, 2016, the Company operated 526 theatres and 5,903 screens in the United States and Latin America. As of December 31, 2016, its the United States circuit had 339 theatres and 4,559 screens in 41 states and its international circuit had 187 theatres and 1,344 screens in 15 countries. It develops new platforms for its theatre circuit, such as XD, Cinemark Reserve, Luxury Lounger reclining seats, CineArts and other concepts.

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