iHeartMedia (NASDAQ:IHRT) and Tencent Music Entertainment Group (NYSE:TME) Critical Analysis

iHeartMedia (NASDAQ:IHRTGet Rating) and Tencent Music Entertainment Group (NYSE:TMEGet Rating) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for iHeartMedia and Tencent Music Entertainment Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
iHeartMedia 1 4 1 0 2.00
Tencent Music Entertainment Group 1 4 0 0 1.80

iHeartMedia currently has a consensus price target of $15.50, suggesting a potential upside of 47.06%. Tencent Music Entertainment Group has a consensus price target of $6.52, suggesting a potential upside of 36.62%. Given iHeartMedia’s stronger consensus rating and higher probable upside, equities analysts clearly believe iHeartMedia is more favorable than Tencent Music Entertainment Group.

Profitability

This table compares iHeartMedia and Tencent Music Entertainment Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
iHeartMedia 2.13% 10.61% 1.05%
Tencent Music Entertainment Group 9.43% 6.10% 4.57%

Insider & Institutional Ownership

73.3% of iHeartMedia shares are owned by institutional investors. Comparatively, 22.6% of Tencent Music Entertainment Group shares are owned by institutional investors. 2.9% of iHeartMedia shares are owned by 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.

Earnings and Valuation

This table compares iHeartMedia and Tencent Music Entertainment Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
iHeartMedia $3.56 billion 0.42 -$159.20 million $0.55 19.16
Tencent Music Entertainment Group $4.90 billion 1.65 $469.49 million $0.26 18.35

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

Risk & Volatility

iHeartMedia has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500. Comparatively, Tencent Music Entertainment Group has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Summary

iHeartMedia beats Tencent Music Entertainment Group on 9 of the 14 factors compared between the two stocks.

About iHeartMedia

(Get Rating)

iHeartMedia, Inc. operates as a media and entertainment company worldwide. It operates through three segments: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group. The Multiplatform Group segment offers broadcast radio stations, sponsorship, and live and virtual events; and operates Premiere Networks, a national radio network that produces, distributes, or represents approximately 120 syndicated radio programs and services to approximately 6,400 radio station affiliates. It also delivers real-time traffic flow and incident information, and weather updates, sports, and news through approximately 2,100 radio stations and 170 television affiliates, and Internet and mobile partnerships. As of December 31, 2021, this segment owned 863 radio stations, which included 249 AM and 614 FM radio stations. The Digital Audio Group segment provides podcasting, digital sites, newsletters, digital services, and programs; and iHeartRadio, a mobile app and web-based service for radio stations, digital-only stations, custom artist stations, and podcasts. The Audio and Media Services Group segment engages in the media representation business. This segment also provides cloud and on-premises broadcast software, such as radio and television automation, music scheduling, newsroom automation, advertising sales management, disaster recovery solutions; and real-time audio recognition technology to approximately 10,000 radio and television stations, cable channels, record labels, advertisers, and agencies, as well as media streaming and research services. The company was formerly known as CC Media Holdings, Inc. and changed its name to iHeartMedia, Inc. in September 2014. iHeartMedia, Inc. is headquartered in San Antonio, Texas.

About Tencent Music Entertainment Group

(Get Rating)

Tencent Music Entertainment Group operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services in the People's Republic of China. It offers QQ Music, Kugou Music, and Kuwo Music that enable users to discover and listen to music in personalized ways; and WeSing, which enables users to have fun by singing and interacting with friends, sharing their singing performances with friends, and discovering songs that others have sung. The company also operates Kugou Music, Kuwo Music, WeSing, QQ Music, Kugou Live, and Kuwo Live that provides an interactive online stage for performers and users to showcase their talent and engage with those interested in their performance; and Kuwo Changting, an audio platform that offers users various audio content, including audio books, cross-talks, radio dramas, and other entertainment. In addition, it sells music-related merchandise, including Kugou headsets, smart speakers, WeSing karaoke microphones, and Hi-Fi systems; and offers online music event ticketing services, as well as services to smart device and automobile makers to build and operate music services on devices and vehicles. Tencent Music Entertainment Group has a strategic partnership with China Literature. The company is headquartered in Shenzhen, China. Tencent Music Entertainment Group is a subsidiary of Tencent Holdings Limited.

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