DHX Media (NASDAQ: DHXM) and World Wrestling Entertainment (NYSE:WWE) are both small-cap cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and price targets for DHX Media and World Wrestling Entertainment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DHX Media 0 3 4 0 2.57
World Wrestling Entertainment 1 2 6 0 2.56

DHX Media presently has a consensus price target of $9.13, indicating a potential upside of 133.97%. World Wrestling Entertainment has a consensus price target of $24.43, indicating a potential upside of 5.80%. Given DHX Media’s stronger consensus rating and higher probable upside, research analysts clearly believe DHX Media is more favorable than World Wrestling Entertainment.

Institutional & Insider Ownership

49.5% of World Wrestling Entertainment shares are owned by institutional investors. 49.8% of World Wrestling Entertainment shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

DHX Media has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, World Wrestling Entertainment has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Profitability

This table compares DHX Media and World Wrestling Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DHX Media 4.46% 5.05% 1.91%
World Wrestling Entertainment 3.29% 13.07% 5.51%

Dividends

DHX Media pays an annual dividend of $0.06 per share and has a dividend yield of 1.5%. World Wrestling Entertainment pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. DHX Media pays out 85.7% 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 154.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares DHX Media and World Wrestling Entertainment’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DHX Media $235.62 million 2.22 $53.05 million $0.07 55.71
World Wrestling Entertainment $762.15 million 2.34 $81.40 million $0.31 74.48

World Wrestling Entertainment has higher revenue and earnings than DHX Media. DHX Media is trading at a lower price-to-earnings ratio than World Wrestling Entertainment, indicating that it is currently the more affordable of the two stocks.

Summary

World Wrestling Entertainment beats DHX Media on 10 of the 15 factors compared between the two stocks.

About DHX Media

DHX Media Ltd is a Canada-based creator, producer, distributor, licensor and broadcaster of kids and family television and film productions. The Company develops, produces and distributes films and television programs for the domestic and international market, broadcasts films and television programs for the domestic markets, as well, the Company manages copyrights, licensing and brands for third parties. It operates through three segments being: Content Business, Copyright Promotions Licensing Group Ltd. (CPLG) and 8504601 Canada Inc. (DHX Television). The Content Business segment includes production, distribution and merchandising operations. The CPLG segment manages copyrights, licensing and brands for third parties. It has five business lines: production (including production service); library and distribution (including digital distribution) of its third party acquired titles; television broadcasting; merchandising and licensing, and new media and interactive.

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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