Lions Gate Entertainment Corp. (NYSE: LGF) and World Wrestling Entertainment (NYSE:WWE) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitabiliy, analyst recommendations, dividends, institutional ownership, valuation and risk.

Profitability

This table compares Lions Gate Entertainment Corp. and World Wrestling Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lions Gate Entertainment Corp. 4.89% 10.25% 2.66%
World Wrestling Entertainment 2.79% 11.35% 5.12%

Earnings & Valuation

This table compares Lions Gate Entertainment Corp. and World Wrestling Entertainment’s gross revenue, earnings per share 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
World Wrestling Entertainment $746.56 million 2.23 $69.74 million $0.26 83.62

World Wrestling Entertainment has higher revenue and earnings than Lions Gate Entertainment Corp.. World Wrestling Entertainment 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.

Analyst Recommendations

This is a breakdown of recent recommendations for Lions Gate Entertainment Corp. and World Wrestling Entertainment, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lions Gate Entertainment Corp. 0 1 15 0 2.94
World Wrestling Entertainment 1 2 7 0 2.60

Lions Gate Entertainment Corp. presently has a consensus price target of $30.94, suggesting a potential upside of 18.58%. World Wrestling Entertainment has a consensus price target of $24.23, suggesting a potential upside of 11.47%. Given Lions Gate Entertainment Corp.’s stronger consensus rating and higher possible upside, equities analysts clearly believe Lions Gate Entertainment Corp. is more favorable than World Wrestling Entertainment.

Institutional & Insider Ownership

96.7% of Lions Gate Entertainment Corp. shares are held by institutional investors. Comparatively, 49.5% of World Wrestling Entertainment shares are held by institutional investors. 30.4% of Lions Gate Entertainment Corp. shares are held by insiders. Comparatively, 49.8% of World Wrestling Entertainment shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Lions Gate Entertainment Corp. pays an annual dividend of $0.27 per share and has a dividend yield of 1.0%. World Wrestling Entertainment pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. 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. World Wrestling Entertainment pays out 184.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lions Gate Entertainment Corp. has increased its dividend for 2 consecutive years.

Risk and Volatility

Lions Gate Entertainment Corp. has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, World Wrestling Entertainment has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Summary

Lions Gate Entertainment Corp. beats World Wrestling Entertainment on 8 of the 14 factors compared between the two stocks.

About Lions Gate Entertainment Corp.

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.

About World Wrestling Entertainment

World Wrestling Entertainment, Inc. (WWE) is an integrated media and entertainment company. The Company’s segments are Network, Television, Home Entertainment, Digital Media, Live Events, Licensing, Venue Merchandise, WWEShop, WWE Studios, and Corporate and Other. The Company is engaged in the production and distribution of content through various channels, including its WWE Network, television rights agreements, pay-per-view event programming, live events, feature films, licensing of various WWE themed products, and the sale of consumer products featuring its brands. Its Network, Television, Home Entertainment and Digital Media are individual segments that comprise the Media Division. Its Live Events, Licensing, Venue Merchandise and WWEShop are individual segments that comprise the Consumer Products Division. Its Network segment consists of subscriptions to WWE Network. The Company’s Television segment consists of television rights fees and advertising.

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