Activision Blizzard (ATVI) and Shanda Games Limited (GAME) Financial Survey

Activision Blizzard (NASDAQ: ATVI) and Shanda Games Limited (NASDAQ:GAME) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.

Dividends

Activision Blizzard pays an annual dividend of $0.30 per share and has a dividend yield of 0.5%. Shanda Games Limited does not pay a dividend. Activision Blizzard pays out 20.4% of its earnings in the form of a dividend.

Institutional & Insider Ownership

87.4% of Activision Blizzard shares are held by institutional investors. 2.1% of Activision Blizzard shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Activision Blizzard and Shanda Games Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Activision Blizzard $6.94 billion 6.74 $2.35 billion $1.47 42.16
Shanda Games Limited N/A N/A N/A N/A N/A

Activision Blizzard has higher revenue and earnings than Shanda Games Limited.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Activision Blizzard and Shanda Games Limited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Activision Blizzard 1 1 21 0 2.87
Shanda Games Limited 0 0 0 0 N/A

Activision Blizzard presently has a consensus target price of $61.30, suggesting a potential downside of 1.08%. Given Activision Blizzard’s higher probable upside, research analysts plainly believe Activision Blizzard is more favorable than Shanda Games Limited.

Profitability

This table compares Activision Blizzard and Shanda Games Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Activision Blizzard 16.17% 17.30% 9.22%
Shanda Games Limited 18.49% 32.56% 15.63%

Summary

Activision Blizzard beats Shanda Games Limited on 6 of the 10 factors compared between the two stocks.

About Activision Blizzard

Activision Blizzard, Inc. is a developer and publisher of interactive entertainment content and services. The Company develops and distributes content and services across various gaming platforms, including video game consoles, personal computers (PC) and mobile devices. Its segments include Activision Publishing, Inc. (Activision), Blizzard Entertainment, Inc. (Blizzard), King Digital Entertainment (King) and Other. Activision is a developer and publisher of interactive software products and content. Blizzard is engaged in developing and publishing of interactive software products and entertainment content, particularly in PC gaming. King is a mobile entertainment company. It is engaged in other businesses, including The Major League Gaming (MLG) business; The Activision Blizzard Studios (Studios) business, and The Activision Blizzard Distribution (Distribution) business. It also develops products spanning other genres, including action/adventure, role-playing and simulation.

About Shanda Games Limited

Shanda Games Limited (Shanda Games) is engaged in the development, operation, and publishing of online games, including both multi-player online role-playing games (MMORPGs or MMO games) and mobile games, as well as related businesses, principally in the People’s Republic of China (the PRC) and also in various other countries. The Company develops and sources an array of game content through multiple channels, including in-house development, licensing, investment, acquisition, joint development and joint operation. Through these channels, it has built a diversified game portfolio and a robust game pipeline. It operates approximately 35 MMO games and approximately 29 mobile games in China and certain overseas markets. Its games include Mir II, BNB, Woool, The Age, Maple Story, Latale, Fengyun Online, A Thousand Years III, AION, Luvinia Online, Dragon Nest, Legend of Immortals, Mir III, Million Arthur, Chain Chronicle, LoveLive!, Iron Knights, Bloodline and Final Fantasy XIV.

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