Critical Comparison: Viacom (NASDAQ:VIAB) & World Wrestling Entertainment (WWE)

Viacom (NASDAQ: VIAB) and World Wrestling Entertainment (NYSE:WWE) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Earnings & Valuation

This table compares Viacom and World Wrestling Entertainment’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Viacom $13.17 billion 0.94 $2.92 billion $3.64 8.42
World Wrestling Entertainment $762.15 million 2.13 $81.40 million $0.31 67.94

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

Dividends

Viacom pays an annual dividend of $0.80 per share and has a dividend yield of 2.6%. World Wrestling Entertainment pays an annual dividend of $0.48 per share and has a dividend yield of 2.3%. Viacom pays out 22.0% of its earnings in the form of a dividend. World Wrestling Entertainment pays out 154.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Viacom is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Viacom has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500. Comparatively, World Wrestling Entertainment has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.

Institutional and Insider Ownership

77.4% of Viacom shares are held by institutional investors. Comparatively, 49.8% of World Wrestling Entertainment shares are held by institutional investors. 0.4% of Viacom shares are held by insiders. Comparatively, 49.8% of World Wrestling Entertainment shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Viacom and World Wrestling Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Viacom 11.04% 30.89% 6.39%
World Wrestling Entertainment 3.29% 13.07% 5.51%

Analyst Recommendations

This is a breakdown of recent ratings for Viacom and World Wrestling Entertainment, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viacom 5 13 10 0 2.18
World Wrestling Entertainment 1 2 6 0 2.56

Viacom presently has a consensus price target of $42.08, suggesting a potential upside of 37.26%. World Wrestling Entertainment has a consensus price target of $24.43, suggesting a potential upside of 16.00%. Given Viacom’s higher probable upside, research analysts clearly believe Viacom is more favorable than World Wrestling Entertainment.

Summary

Viacom beats World Wrestling Entertainment on 12 of the 16 factors compared between the two stocks.

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.

About World Wrestling Entertainment

World Wrestling Entertainment, Inc. (WWE) is an integrated media and entertainment company. The Company’s segments are Network, Television, Home Entertainment, Digital Media, Live Events, Licensing, Venue Merchandise, WWEShop, WWE Studios, and Corporate and Other. The Company is engaged in the production and distribution of content through various channels, including its WWE Network, television rights agreements, pay-per-view event programming, live events, feature films, licensing of various WWE themed products, and the sale of consumer products featuring its brands. Its Network, Television, Home Entertainment and Digital Media are individual segments that comprise the Media Division. Its Live Events, Licensing, Venue Merchandise and WWEShop are individual segments that comprise the Consumer Products Division. Its Network segment consists of subscriptions to WWE Network. The Company’s Television segment consists of television rights fees and advertising.

Receive News & Ratings for Viacom Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Viacom Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply