Critical Contrast: Viacom (VIA) and FunctionX (FNCX)

Viacom (NASDAQ: VIA) and FunctionX (OTCMKTS:FNCX) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Viacom and FunctionX, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viacom 1 2 2 0 2.20
FunctionX 0 0 0 0 N/A

Viacom presently has a consensus target price of $36.00, indicating a potential upside of 7.30%. Given Viacom’s higher possible upside, analysts clearly believe Viacom is more favorable than FunctionX.

Dividends

Viacom pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. FunctionX does not pay a dividend. Viacom pays out 17.2% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Viacom and FunctionX’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Viacom $13.26 billion 1.02 $1.87 billion $4.66 7.20
FunctionX $4.51 million 0.30 -$61.86 million ($7.95) -0.01

Viacom has higher revenue and earnings than FunctionX. FunctionX is trading at a lower price-to-earnings ratio than Viacom, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Viacom has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, FunctionX has a beta of -0.56, indicating that its stock price is 156% less volatile than the S&P 500.

Profitability

This table compares Viacom and FunctionX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Viacom 20.94% 47.25% 11.91%
FunctionX N/A N/A N/A

Insider and Institutional Ownership

2.4% of Viacom shares are held by institutional investors. 0.7% of Viacom shares are held by company insiders. Comparatively, 60.5% of FunctionX shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Viacom beats FunctionX on 13 of the 15 factors compared between the two stocks.

Viacom Company Profile

Viacom Inc. offers global media brands that create television programs, motion pictures, short-form content, applications, games, consumer products, social media experiences and other entertainment content. As of September 30, 2016, the Company offered its services for audiences in more than 180 countries. The Company operates through two segments: Media Networks and Filmed Entertainment. The Media Networks segment creates, acquires and distributes programming and other content for audiences The Media Networks segment provides entertainment content and related branded products for advertisers, content distributors and retailers. The Filmed Entertainment segment produces, finances, acquires and distributes motion pictures, television programming and other entertainment content under the Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Animation, Insurge Pictures, Nickelodeon Movies, MTV Films and Paramount Television brands.

FunctionX Company Profile

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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