Netflix (NASDAQ:NFLX – Get Free Report) and GigaMedia (NASDAQ:GIGM – Get Free Report) are both communication services companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.
Earnings & Valuation
This table compares Netflix and GigaMedia”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Netflix | $45.18 billion | 6.61 | $10.98 billion | $3.18 | 22.55 |
| GigaMedia | $3.47 million | 4.36 | -$1.55 million | ($0.18) | -7.61 |
Analyst Recommendations
This is a breakdown of current recommendations for Netflix and GigaMedia, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Netflix | 2 | 16 | 33 | 4 | 2.71 |
| GigaMedia | 1 | 0 | 0 | 0 | 1.00 |
Netflix currently has a consensus price target of $95.51, suggesting a potential upside of 33.17%. Given Netflix’s stronger consensus rating and higher probable upside, research analysts plainly believe Netflix is more favorable than GigaMedia.
Institutional & Insider Ownership
80.9% of Netflix shares are owned by institutional investors. Comparatively, 13.5% of GigaMedia shares are owned by institutional investors. 1.2% of Netflix shares are owned by company insiders. Comparatively, 1.0% of GigaMedia shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Netflix and GigaMedia’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Netflix | 28.22% | 40.02% | 19.81% |
| GigaMedia | -43.36% | -5.36% | -5.02% |
Risk and Volatility
Netflix has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, GigaMedia has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.
Summary
Netflix beats GigaMedia on 15 of the 15 factors compared between the two stocks.
About Netflix
Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. It has operations in approximately 190 countries. The company was incorporated in 1997 and is headquartered in Los Gatos, California.
About GigaMedia
GigaMedia Limited, together with its subsidiaries, provides digital entertainment services in Taiwan, Hong Kong, and Macau. The company owns and operates FunTown, a digital entertainment portal that offers mobile and browser-based casual games, as well as provides services such as player clubs, tournaments, avatars, friends and family messenger and online chatting systems, customer service, mobile platform, and customer platform. It also offers MahJong, a traditional Chinese tile-based game; casual card and table games; online card games; and chance-based games, including bingo, lotto, horse racing, Sic-Bo, slots, and other casual games. In addition, the company provides role-playing and sports games, such as Tales Runner, a multi-player online obstacle running game; Yume 100, a story-based game that targets female players; Akaseka, a female-oriented game; and Shinobi Master New Link, a male-oriented game. GigaMedia Limited was founded in 1998 and is headquartered in Taipei, Taiwan.
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