Analyzing Lions Gate Entertainment Corp. (LGF) and DHX Media (DHXM)

DHX Media (NASDAQ: DHXM) and Lions Gate Entertainment Corp. (NYSE:LGF) are both entertainment production – nec companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current ratings and target prices for DHX Media and Lions Gate Entertainment Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DHX Media 0 3 4 0 2.57
Lions Gate Entertainment Corp. 0 1 14 0 2.93

DHX Media presently has a consensus target price of $9.33, indicating a potential upside of 196.30%. Lions Gate Entertainment Corp. has a consensus target price of $32.62, indicating a potential upside of 8.00%. Given DHX Media’s higher possible upside, analysts plainly believe DHX Media is more favorable than Lions Gate Entertainment Corp..

Insider & Institutional Ownership

96.7% of Lions Gate Entertainment Corp. shares are owned by institutional investors. 30.4% of Lions Gate Entertainment Corp. 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.

Dividends

DHX Media pays an annual dividend of $0.06 per share and has a dividend yield of 1.9%. Lions Gate Entertainment Corp. pays an annual dividend of $0.27 per share and has a dividend yield of 0.9%. DHX Media pays out -300.0% of its earnings in the form of a dividend. Lions Gate Entertainment Corp. 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 Corp. has increased its dividend for 2 consecutive years. DHX Media is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares DHX Media and Lions Gate Entertainment Corp.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
DHX Media N/A N/A N/A ($0.02) -157.50
Lions Gate Entertainment Corp. N/A N/A N/A $0.22 137.27

DHX Media is trading at a lower price-to-earnings ratio than Lions Gate Entertainment Corp., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DHX Media and Lions Gate Entertainment Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DHX Media 4.46% 5.05% 1.91%
Lions Gate Entertainment Corp. 17.36% 26.35% 7.85%

Summary

Lions Gate Entertainment Corp. beats DHX Media on 9 of the 12 factors compared between the two stocks.

About DHX Media

DHX Media Ltd is a Canada-based creator, producer, distributor, licensor and broadcaster of kids and family television and film productions. The Company develops, produces and distributes films and television programs for the domestic and international market, broadcasts films and television programs for the domestic markets, as well, the Company manages copyrights, licensing and brands for third parties. It operates through three segments being: Content Business, Copyright Promotions Licensing Group Ltd. (CPLG) and 8504601 Canada Inc. (DHX Television). The Content Business segment includes production, distribution and merchandising operations. The CPLG segment manages copyrights, licensing and brands for third parties. It has five business lines: production (including production service); library and distribution (including digital distribution) of its third party acquired titles; television broadcasting; merchandising and licensing, and new media and interactive.

About Lions Gate Entertainment Corp.

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.

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