Lions Gate Entertainment (NYSE: LGF) and Function(x) (OTCMKTS:FNCX) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.
Lions Gate Entertainment pays an annual dividend of $0.27 per share and has a dividend yield of 1.0%. Function(x) does not pay a dividend. Lions Gate Entertainment pays out 122.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lions Gate Entertainment has increased its dividend for 2 consecutive years.
This is a summary of current recommendations for Lions Gate Entertainment and Function(x), as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Lions Gate Entertainment||0||1||14||0||2.93|
Lions Gate Entertainment presently has a consensus price target of $32.62, indicating a potential upside of 25.01%. Given Lions Gate Entertainment’s higher possible upside, analysts clearly believe Lions Gate Entertainment is more favorable than Function(x).
This table compares Lions Gate Entertainment and Function(x)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Lions Gate Entertainment||1.37%||2.22%||0.60%|
Earnings and Valuation
This table compares Lions Gate Entertainment and Function(x)’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lions Gate Entertainment||N/A||N/A||N/A||$0.22||118.59|
|Function(x)||$4.51 million||0.39||-$61.86 million||N/A||N/A|
Lions Gate Entertainment has higher earnings, but lower revenue than Function(x).
Risk & Volatility
Lions Gate Entertainment has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Function(x) has a beta of -0.65, suggesting that its stock price is 165% less volatile than the S&P 500.
Institutional & Insider Ownership
96.7% of Lions Gate Entertainment shares are held by institutional investors. Comparatively, 0.0% of Function(x) shares are held by institutional investors. 30.4% of Lions Gate Entertainment shares are held by insiders. Comparatively, 60.5% of Function(x) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Lions Gate Entertainment beats Function(x) on 9 of the 12 factors compared between the two stocks.
About Lions Gate Entertainment
Lions Gate Entertainment Corp. is engaged in motion picture production and distribution, television programming and syndication, home entertainment, international distribution and sales, branded channel platforms, interactive ventures and games and location-based entertainment. The Company operates through two segments: Motion Pictures and Television Production. The Company’s Motion Pictures segment consists of the development and production of feature films, acquisition of North American and around the world distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and around the world licensing of distribution rights to feature films produced and acquired. The Company’s Television Production segment consists of the development, production and around the world distribution of television productions, including television series, television movies, and mini-series and non-fiction programming.
Function(x) Inc., formerly DraftDay Fantasy Sports, Inc., is a diversified media and entertainment company. The Company conducts three lines of businesses, which are digital publishing through Wetpaint.com, Inc. (Wetpaint) and Rant, Inc. (Rant); fantasy sports gaming through DraftDay Gaming Group, Inc. (DDGG), and digital content distribution through Choose Digital, Inc. (Choose Digital). The Company’s segments include Wetpaint, which is a media channel reporting original news stories and publishing information content covering television shows, music, celebrities, entertainment news and fashion; Choose Digital, which is a business-to-business platform for delivering digital content; DDGG, which is a business-to-business operator of daily fantasy sports, and Other. The Company’s digital publishing business also includes Rant, which is a digital publisher that publishes original content in over 13 verticals, such as in sports, entertainment, pets, cars and food.
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