Analyzing Regal Entertainment Group (RGC) & Carmike Cinemas (CKEC)

Carmike Cinemas (NASDAQ: CKEC) and Regal Entertainment Group (NYSE:RGC) are both cyclical consumer goods & services companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitabiliy, dividends, earnings and analyst recommendations.

Dividends

Regal Entertainment Group pays an annual dividend of $0.88 per share and has a dividend yield of 4.9%. Carmike Cinemas does not pay a dividend. Regal Entertainment Group pays out 82.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Carmike Cinemas and Regal Entertainment Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carmike Cinemas N/A N/A N/A $0.23 145.22
Regal Entertainment Group $3.21 billion 0.75 $583.50 million $1.07 16.83

Regal Entertainment Group has higher revenue and earnings than Carmike Cinemas. Regal Entertainment Group is trading at a lower price-to-earnings ratio than Carmike Cinemas, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

87.5% of Carmike Cinemas shares are owned by institutional investors. Comparatively, 77.2% of Regal Entertainment Group shares are owned by institutional investors. 5.6% of Carmike Cinemas shares are owned by company insiders. Comparatively, 2.0% of Regal Entertainment Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Carmike Cinemas and Regal Entertainment Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carmike Cinemas -1.56% -1.97% -1.44%
Regal Entertainment Group 5.24% -20.38% 6.59%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Carmike Cinemas and Regal Entertainment Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carmike Cinemas 0 2 0 0 2.00
Regal Entertainment Group 3 3 6 1 2.38

Carmike Cinemas currently has a consensus price target of $32.88, suggesting a potential downside of 1.57%. Regal Entertainment Group has a consensus price target of $24.54, suggesting a potential upside of 36.25%. Given Regal Entertainment Group’s stronger consensus rating and higher probable upside, analysts clearly believe Regal Entertainment Group is more favorable than Carmike Cinemas.

Volatility & Risk

Carmike Cinemas has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, Regal Entertainment Group has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Summary

Regal Entertainment Group beats Carmike Cinemas on 9 of the 14 factors compared between the two stocks.

About Carmike Cinemas

Carmike Cinemas, Inc. is a motion picture exhibitor company. The Company owns and operates theatres and screens. Its theatres are equipped to provide digital cinema. It owns, operates or has an interest in approximately 280 theatres with over 2,940 screens located in over 40 states. In addition, it has approximately 260 theatres with over 1,090 screens equipped for three dimension (3-D). It operates approximately 20 theatres with over 110 screens as discount theatres. It operates approximately 50 premium large-format auditoriums, which operate under the Big D, IMAX and MuviXL names. Big D auditoriums include wall to wall screens, approximately 7.1 surround sound and digital projection for both two dimensional (2-D) and 3-D features. The Company operates a family entertainment center under the name Hollywood Connection, which features a multiplex theatre and other forms of family entertainment. The Company also operates over two Bogart’s Bar and Grill Restaurants.

About Regal Entertainment Group

Regal Entertainment Group is an operator of theatre circuits in the United States. As of March 31, 2017, the Company operated 7,262 screens in 559 theatres in 43 states along with Guam, Saipan, American Samoa and the District of Columbia. The Company manages its business under theatre exhibition operations segment. The Company develops, acquires and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of metropolitan markets throughout the United States. The Company operates multi-screen theatres. The Company is the parent company of Regal Entertainment Holdings, Inc. (REH), which is the parent company of Regal Cinemas Corporation (Regal Cinemas) and its subsidiaries. Regal Cinemas’ subsidiaries include Regal Cinemas, Inc. (RCI) and its subsidiaries, which include Edwards Theatres, Inc. (Edwards), Regal CineMedia Corporation (RCM) and United Artists Theatre Company (United Artists).

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