Lionsgate (NYSE: LGF.A) and World Wrestling Entertainment (NYSE:WWE) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Valuation and Earnings

This table compares Lionsgate and World Wrestling Entertainment’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lionsgate $4.13 billion 1.18 $473.60 million $1.23 18.84
World Wrestling Entertainment $801.00 million 5.58 $32.64 million $0.65 89.06

Lionsgate has higher revenue and earnings than World Wrestling Entertainment. Lionsgate 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.

Volatility and Risk

Lionsgate has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, World Wrestling Entertainment has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Dividends

Lionsgate pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. World Wrestling Entertainment pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. Lionsgate pays out 29.3% of its earnings in the form of a dividend. World Wrestling Entertainment pays out 73.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lionsgate is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

34.3% of Lionsgate shares are owned by institutional investors. Comparatively, 60.0% of World Wrestling Entertainment shares are owned by institutional investors. 26.5% of Lionsgate shares are owned by company insiders. Comparatively, 45.1% of World Wrestling Entertainment 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Lionsgate 11.47% 8.04% 2.71%
World Wrestling Entertainment 5.81% 23.28% 9.71%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Lionsgate and World Wrestling Entertainment, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lionsgate 0 5 12 0 2.71
World Wrestling Entertainment 0 4 7 0 2.64

Lionsgate currently has a consensus target price of $33.36, suggesting a potential upside of 43.97%. World Wrestling Entertainment has a consensus target price of $47.20, suggesting a potential downside of 18.47%. Given Lionsgate’s stronger consensus rating and higher possible upside, analysts clearly believe Lionsgate is more favorable than World Wrestling Entertainment.

Summary

Lionsgate beats World Wrestling Entertainment on 10 of the 16 factors compared between the two stocks.

World Wrestling Entertainment Company Profile

World Wrestling Entertainment, Inc., an integrated media and entertainment company, engages in the sports entertainment business in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through Network, Television, Home Entertainment, Digital Media, Live Events, Licensing, Venue Merchandise, WWEShop, and WWE Studios segments. It operates WWE Network, a live streaming network that offers pay-per-view events, original programming, and video-on-demand library; and produces television programming, reality shows, and other programming, as well as produces content via home entertainment platforms, including DVD, Blu-Ray, subscription, and transactional on-demand outlets. The company also offers broadband and mobile content through its Websites and third party Websites; produces live events; and licenses various WWE themed products, such as video games, toys, apparel, books, and music. In addition, it designs, sources, markets, and distributes various WWE-branded products, such as T-shirts, belts, caps, and other novelty items; operates WWEShop, an e-commerce storefront; and WWE Studios that produces and distributes filmed entertainment content, such as movies for theatrical, home entertainment, and/or television release. World Wrestling Entertainment, Inc. was founded in 1980 and is headquartered in Stamford, Connecticut.

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