Financial Contrast: ADT (ADT) and Ascent Capital Group (ASCMA)

ADT (NYSE: ADT) and Ascent Capital Group (NASDAQ:ASCMA) are both security services companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for ADT and Ascent Capital Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ADT 0 0 0 0 N/A
Ascent Capital Group 0 2 1 0 2.33

Ascent Capital Group has a consensus target price of $14.33, suggesting a potential upside of 35.60%. Given Ascent Capital Group’s higher probable upside, analysts plainly believe Ascent Capital Group is more favorable than ADT.

Valuation and Earnings

This table compares ADT and Ascent Capital Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ADT N/A N/A N/A ($0.50) -24.78
Ascent Capital Group $570.37 million 0.23 -$91.24 million ($9.03) -1.17

ADT has higher earnings, but lower revenue than Ascent Capital Group. ADT is trading at a lower price-to-earnings ratio than Ascent Capital Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

80.7% of Ascent Capital Group shares are owned by institutional investors. 9.6% of Ascent Capital Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

ADT pays an annual dividend of $0.88 per share and has a dividend yield of 7.1%. Ascent Capital Group does not pay a dividend. ADT pays out -176.0% of its earnings in the form of a dividend. Ascent Capital Group has raised its dividend for 5 consecutive years.

Profitability

This table compares ADT and Ascent Capital Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ADT N/A N/A N/A
Ascent Capital Group -19.68% -56.10% -5.20%

Summary

Ascent Capital Group beats ADT on 7 of the 13 factors compared between the two stocks.

ADT Company Profile

The ADT Corporation (ADT) is a provider of electronic security, interactive home and business automation, and monitoring services for residences and small businesses in the United States and Canada. The Company’s products and services include home and business solutions, and home health services. The Company’s brands include ADT, ADT Pulse and Companion Service. On August 2, 2013, the Company acquired Devcon Security Holdings, Inc. In November 2013, Kastle Systems International announced that it had acquired Mutual Central Alarm Services and Stat-Land Security Systems from ADT Corporation. In July 2014, ADT Corp acquired Reliance Protectron Inc, from Reliance Comfort Limited Partnership, a portfolio company of investment funds managed by Alinda Capital Partners.

Ascent Capital Group Company Profile

Ascent Capital Group, Inc. is a holding company. The Company’s subsidiaries include Monitronics International, Inc. (MONI) and LiveWatch Security, LLC (LiveWatch). The Company’s segments include MONI, LiveWatch and Other Activities. The MONI segment is primarily engaged in the business of providing security alarm monitoring services: monitoring signals arising from burglaries, fires, medical alerts and other events through security systems at subscribers’ premises, as well as providing customer service and technical support. LiveWatch is a do-it-yourself home security provider offering professionally monitored security services through a direct-to-consumer sales channel. LiveWatch offers a differentiated go-to-market strategy through direct response television, Internet and radio advertising. When a customer initiates the process to obtain monitoring services, LiveWatch pre-configures the alarm monitoring system based on customer specifications.

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