Digital Cinema Destinations (NASDAQ: DCIN) and Reading International (NASDAQ:RDI) are both small-cap cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Profitability

This table compares Digital Cinema Destinations and Reading International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digital Cinema Destinations N/A N/A N/A
Reading International 8.70% 8.16% 3.24%

Institutional & Insider Ownership

35.2% of Reading International shares are owned by institutional investors. 25.6% of Reading International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Digital Cinema Destinations and Reading International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digital Cinema Destinations N/A N/A N/A ($0.52) -11.52
Reading International $270.47 million 1.36 $9.40 million $1.03 15.64

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Digital Cinema Destinations and Reading International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Cinema Destinations 0 0 0 0 N/A
Reading International 0 0 2 0 3.00

Reading International has a consensus price target of $26.50, suggesting a potential upside of 64.49%. Given Reading International’s higher possible upside, analysts clearly believe Reading International is more favorable than Digital Cinema Destinations.

Summary

Reading International beats Digital Cinema Destinations on 9 of the 9 factors compared between the two stocks.

Digital Cinema Destinations Company Profile

Digital Cinema Destinations Corp., operates eight theatres and 73 screens located in Westfield, New Jersey (Rialto), Cranford, New Jersey (Cranford), Bloomfield, Connecticut (the Bloomfield 8) and five theatres located in central Pennsylvania (Cinema Centers). During the fiscal year ended June 30, 2012 (fiscal 2012), the Company operates eight theatres, two in New Jersey, with a total of 11 screens, one in Connecticut, with a total of 8 screens and five in central Pennsylvania, with a total of 54 screens. In March 2014, the Company announced that it has completed the acquisition of a seven screen theater in Churchville, MD from Flagship Cinemas.

Reading International Company Profile

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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