Warner Music Group (NASDAQ:WMG) vs. CuriosityStream (NASDAQ:CURI) Financial Review

Warner Music Group (NASDAQ:WMG) and CuriosityStream (NASDAQ:CURI) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Dividends

Warner Music Group pays an annual dividend of $0.72 per share and has a dividend yield of 2.3%. CuriosityStream pays an annual dividend of $0.32 per share and has a dividend yield of 7.2%. Warner Music Group pays out 82.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CuriosityStream pays out -355.6% of its earnings in the form of a dividend. Warner Music Group has increased its dividend for 4 consecutive years and CuriosityStream has increased its dividend for 1 consecutive years. CuriosityStream is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Warner Music Group and CuriosityStream”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Warner Music Group	$6.43 billion	2.57	$435.00 million	$0.87	36.45
CuriosityStream	$51.13 million	4.98	-$12.94 million	($0.09)	-49.11

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

Insider and Institutional Ownership

96.9% of Warner Music Group shares are held by institutional investors. Comparatively, 6.8% of CuriosityStream shares are held by institutional investors. 72.2% of Warner Music Group shares are held by insiders. Comparatively, 49.6% of CuriosityStream shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Warner Music Group and CuriosityStream’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Warner Music Group	4.59%	39.95%	3.16%
CuriosityStream	-7.84%	-8.37%	-5.65%

Analyst Recommendations

This is a summary of current ratings for Warner Music Group and CuriosityStream, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Warner Music Group	0	10	9	1	2.55
CuriosityStream	0	0	2	0	3.00

Warner Music Group presently has a consensus price target of $33.8333, indicating a potential upside of 6.70%. CuriosityStream has a consensus price target of $5.75, indicating a potential upside of 30.09%. Given CuriosityStream’s stronger consensus rating and higher possible upside, analysts clearly believe CuriosityStream is more favorable than Warner Music Group.

Risk & Volatility

Warner Music Group has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, CuriosityStream has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Summary

Warner Music Group beats CuriosityStream on 12 of the 18 factors compared between the two stocks.

About Warner Music Group

Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally. It operates through Recorded Music and Music Publishing segments. The Recorded Music segment is involved in the discovery and development of recording artists, as well as related marketing, promotion, distribution, sale, and licensing of music created by such recording artists; markets its music catalog through compilations and reissuances of previously released music and video titles, as well as previously unreleased materials; and conducts its operation primarily through a collection of record labels, such as Warner Records and Atlantic Records, as well as Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Roadrunner, Sire, Spinnin’ Records, Warner Classics, and Warner Music Nashville. This segment markets, distributes, and sells music and video products to retailers and wholesale distributors; independent labels to retail and wholesale distributors; and various distribution centers and ventures, as well as retail outlets, online physical retailers, streaming services, and download services. The Music Publishing segment owns and acquires rights to approximately one million musical compositions comprising pop hits, American standards, folk songs, and motion picture and theatrical compositions. Its catalog includes approximately 150,000 songwriters and composers; and various genres, including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative, and gospel. This segment also administers the music and soundtracks of various third-party television and film producers and studios. The company was founded in 1929 and is headquartered in New York, New York.

About CuriosityStream

CuriosityStream Inc. operates as a factual content streaming service and media company. The company provides premium video and audio programming services in various categories of factual entertainment, including science, history, society, nature, lifestyle, and technology through direct subscription video on-demand (SVoD) platforms accessible by internet connected devices, or indirectly via distribution partners who deliver CuriosityStream content via distributor's platform or system, as well as through bundled content licenses for SVoD and linear offerings, talks and courses, and partner bulk sales. It offers streaming content through devices, including televisions, set-top boxes, computers, streaming media players, game consoles, and mobile devices. The company was founded in 2015 and is based in Silver Spring, Maryland.