Analyzing DTS (DTSI) & Lions Gate Entertainment Corp. (LGF)

DTS (NASDAQ: DTSI) and Lions Gate Entertainment Corp. (NYSE:LGF) are both cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Valuation & Earnings

This table compares DTS and Lions Gate Entertainment Corp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
DTS N/A N/A N/A ($0.42) -101.24
Lions Gate Entertainment Corp. N/A N/A N/A $0.22 137.27

DTS 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.

Dividends

DTS pays an annual dividend of $0.08 per share and has a dividend yield of 0.2%. Lions Gate Entertainment Corp. pays an annual dividend of $0.27 per share and has a dividend yield of 0.9%. DTS pays out -19.0% 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. DTS has increased its dividend for 2 consecutive years.

Institutional and Insider Ownership

98.1% of DTS shares are held by institutional investors. Comparatively, 96.7% of Lions Gate Entertainment Corp. shares are held by institutional investors. 11.3% of DTS shares are held by company insiders. Comparatively, 30.4% of Lions Gate Entertainment Corp. shares are held 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 DTS and Lions Gate Entertainment Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DTS 1.17% 1.04% 0.59%
Lions Gate Entertainment Corp. 17.36% 26.35% 7.85%

Analyst Ratings

This is a summary of recent ratings and recommmendations for DTS and Lions Gate Entertainment Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DTS 0 0 0 0 N/A
Lions Gate Entertainment Corp. 0 1 14 0 2.93

Lions Gate Entertainment Corp. has a consensus price target of $32.62, indicating a potential upside of 8.00%. Given Lions Gate Entertainment Corp.’s higher probable upside, analysts clearly believe Lions Gate Entertainment Corp. is more favorable than DTS.

Summary

Lions Gate Entertainment Corp. beats DTS on 8 of the 11 factors compared between the two stocks.

DTS Company Profile

DTS, Inc. is an audio technology solutions provider for high-definition entertainment experiences. The Company’s audio solutions are designed to enable recording, delivery and playback of high-definition audio, and are included by licensee customers around the world into a range of consumer electronics devices, including televisions, personal computers (PCs), smartphones, tablets, digital media players (DMPs), set-top-boxes, soundbars, wireless speakers, video game consoles, Blu-ray Disc players, automotive audio systems, audio/video receivers (AVRs), digital versatile disc (DVD)-based products and home theater systems. In the wireless speakers market, the Company maintains a Play-Fi Certified original design manufacturer (ODM) Program. The Company’s market base includes Blu-ray, Home audio video (AV) and Automotive. The Blu-ray market includes standalone players, gaming devices and disc drives included in PCs.

Lions Gate Entertainment Corp. Company Profile

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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