Manchester United (NYSE: MANU) and Reading International (NASDAQ:RDI) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Dividends

Manchester United pays an annual dividend of $0.18 per share and has a dividend yield of 1.1%. Reading International does not pay a dividend. Manchester United pays out 180.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Manchester United and Reading International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Manchester United 2.51% 4.36% 1.40%
Reading International 9.36% 9.86% 3.84%

Risk & Volatility

Manchester United has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Reading International has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Manchester United and Reading International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Manchester United 0 0 3 0 3.00
Reading International 0 0 1 0 3.00

Manchester United currently has a consensus price target of $20.47, indicating a potential upside of 21.10%. Reading International has a consensus price target of $26.50, indicating a potential upside of 65.52%. Given Reading International’s higher possible upside, analysts clearly believe Reading International is more favorable than Manchester United.

Institutional & Insider Ownership

72.3% of Manchester United shares are owned by institutional investors. Comparatively, 33.3% of Reading International shares are owned by institutional investors. 26.8% of Reading International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Manchester United and Reading International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Manchester United $697.75 million 0.97 $217.11 million $0.10 169.02
Reading International $280.63 million 1.32 $54.47 million $1.12 14.29

Manchester United has higher revenue and earnings than Reading International. Reading International is trading at a lower price-to-earnings ratio than Manchester United, indicating that it is currently the more affordable of the two stocks.

Summary

Reading International beats Manchester United on 9 of the 15 factors compared between the two stocks.

About Manchester United

Manchester United plc is engaged in the operation of a professional football club together with related and ancillary activities. Its football operations primarily comprise various activities, such as its first team, reserve team, youth academy, global scouting networks and other operations, such as its sport science, medical and fitness operations at the Aon Training Complex. It operates in three sectors, including Commercial, Broadcasting and Matchday. Within the Commercial revenue sector, the Company monetizes its global brand through approximately three revenue streams, such as sponsorship; retail, merchandising, apparel and product licensing, and mobile and content. It monetizes the value of its global brand and community of followers through marketing and sponsorship relationships with international and regional companies around the world. It markets and sells sports apparel, training and leisure wear and other clothing featuring the Manchester United brand on a global basis.

About Reading International

Reading International, Inc. (RDI) is engaged in the development, ownership and operation of multiplex cinemas in the United States, Australia, and New Zealand, and the development, ownership and operation of retail and commercial real estate in the United States, Australia and New Zealand. RDI operates through two segments: cinema exhibition and real estate. The cinema exhibition segment operates multiplex cinemas. RDI’s real estate segment includes real estate development and the rental of retail, commercial and live theater assets. The Company manages its cinema exhibition businesses around the world under various brands, including Reading Cinema, Angelika Film Centers, Consolidated Theatres and City Cinemas brands in the United States; under the Reading Cinema brand in Australia, and under the Reading Cinema and Rialto brands in New Zealand.

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