Critical Survey: Viacom (VIA) vs. Its Rivals

Viacom (NASDAQ: VIA) is one of 25 publicly-traded companies in the “Entertainment Production” industry, but how does it weigh in compared to its competitors? We will compare Viacom to similar companies based on the strength of its profitability, dividends, risk, institutional ownership, earnings, valuation and analyst recommendations.

Earnings and Valuation

This table compares Viacom and its competitors revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Viacom $13.17 billion $2.92 billion 9.30
Viacom Competitors $6.27 billion $1.49 billion 150.14

Viacom has higher revenue and earnings than its competitors. Viacom is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Viacom and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Viacom 11.04% 30.89% 6.39%
Viacom Competitors 2.67% 10.87% 3.53%

Risk & Volatility

Viacom has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500. Comparatively, Viacom’s competitors have a beta of 0.92, suggesting that their average share price is 8% less volatile than the S&P 500.

Institutional & Insider Ownership

2.3% of Viacom shares are owned by institutional investors. Comparatively, 46.5% of shares of all “Entertainment Production” companies are owned by institutional investors. 0.7% of Viacom shares are owned by company insiders. Comparatively, 27.7% of shares of all “Entertainment Production” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Viacom pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. Viacom pays out 22.0% of its earnings in the form of a dividend. As a group, “Entertainment Production” companies pay a dividend yield of 1.4% and pay out 29.9% of their earnings in the form of a dividend. Viacom is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Viacom and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viacom 2 5 4 0 2.18
Viacom Competitors 104 477 1231 24 2.64

Viacom currently has a consensus price target of $42.86, indicating a potential upside of 26.61%. As a group, “Entertainment Production” companies have a potential upside of 12.50%. Given Viacom’s higher probable upside, equities research analysts clearly believe Viacom is more favorable than its competitors.

Summary

Viacom beats its competitors on 9 of the 15 factors compared.

About Viacom

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.

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