Eros International (NYSE: EROS) and Taomee (NYSE:TAOM) are both small-cap cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.

Risk & Volatility

Eros International has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Taomee has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Profitability

This table compares Eros International and Taomee’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eros International 0.96% 0.22% 0.15%
Taomee 2.06% -0.90% 0.75%

Insider & Institutional Ownership

60.5% of Eros International shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Eros International and Taomee, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eros International 0 0 2 0 3.00
Taomee 0 0 0 0 N/A

Eros International currently has a consensus price target of $17.00, suggesting a potential upside of 80.85%. Given Eros International’s higher probable upside, equities analysts plainly believe Eros International is more favorable than Taomee.

Valuation & Earnings

This table compares Eros International and Taomee’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eros International $252.99 million 1.91 $3.80 million N/A N/A
Taomee N/A N/A N/A ($0.09) -41.11

Eros International has higher revenue and earnings than Taomee.

Summary

Eros International beats Taomee on 6 of the 9 factors compared between the two stocks.

Eros International Company Profile

Eros International Plc (Eros) is a holding company, which serves the Indian film entertainment industry. The Company’s principal activities include the acquisition, co-production and distribution of Indian films and related content. It distributes its film content through the distribution channels, such as theatrical, including multiplex chains and standalone theaters; television syndication, including satellite television broadcasting, cable television and terrestrial television; digital and ancillary, including music, inflight entertainment, home video, Internet protocol television (IPTV), video on demand (VOD), and Internet channels and Eros Now. As of March 31, 2016, its distribution network extends to over 50 countries, such as the United States, the United Kingdom, the Middle East, Germany, Poland, Russia, Romania, Indonesia and Arabic speaking countries. It conducts global operations through its Indian and international subsidiaries, including Eros International Media Limited.

Taomee Company Profile

Taomee Holdings Limited is a children’s entertainment and media company in China. The Company is engaged in developing branded entertainment experiences across online and mobile platforms. It has developed branded entertainment franchises, including its major franchises of Mole’s World, Seer and Flower Angel. In addition, the Company also operates the franchise of Canimals in China. The Company’s brands and franchises have expanded into various online and offline platforms, including the virtual worlds, video streaming site, mobile games and applications, social networking, films and cartoon animations, merchandising and toys. The Company provides a portfolio of services and products through two business segments: online business and offline business.

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