Critical Comparison: Lionsgate Studios (NYSE:LION) and Reservoir Media (NASDAQ:RSVR)

Lionsgate Studios (NYSE:LION) and Reservoir Media (NASDAQ:RSVR) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Lionsgate Studios and Reservoir Media, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lionsgate Studios	0	4	7	2	2.85
Reservoir Media	0	0	1	0	3.00

Lionsgate Studios currently has a consensus price target of $8.75, indicating a potential upside of 24.64%. Reservoir Media has a consensus price target of $11.50, indicating a potential upside of 46.12%. Given Reservoir Media’s stronger consensus rating and higher probable upside, analysts plainly believe Reservoir Media is more favorable than Lionsgate Studios.

Insider and Institutional Ownership

44.4% of Reservoir Media shares are held by institutional investors. 9.4% of Lionsgate Studios shares are held by insiders. Comparatively, 27.0% of Reservoir Media shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Lionsgate Studios and Reservoir Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lionsgate Studios	-6.19%	N/A	-1.86%
Reservoir Media	4.67%	2.07%	0.90%

Volatility and Risk

Lionsgate Studios has a beta of -0.21, indicating that its stock price is 121% less volatile than the S&P 500. Comparatively, Reservoir Media has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Valuation & Earnings

This table compares Lionsgate Studios and Reservoir Media”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lionsgate Studios	$3.23 billion	0.63	-$125.30 million	($0.67)	-10.48
Reservoir Media	$158.71 million	3.25	$7.75 million	$0.11	71.55

Reservoir Media has lower revenue, but higher earnings than Lionsgate Studios. Lionsgate Studios is trading at a lower price-to-earnings ratio than Reservoir Media, indicating that it is currently the more affordable of the two stocks.

Summary

Reservoir Media beats Lionsgate Studios on 12 of the 15 factors compared between the two stocks.

About Lionsgate Studios

Lionsgate Studios Corp. engages in the provision of motion picture and studio operations that bring a varied portfolio of entertainment to consumers. The company is headquartered in Santa Monica, CA.

About Reservoir Media

Reservoir Media, Inc. operates as a music publishing company. It operates through two segments, Music Publishing and Recorded Music. The Music Publishing segment acquires interests in music catalogs, as well as signs songwriters. The Recorded Music segment engages in the acquisition of sound recording catalogs; discovery and development of recording artists; and marketing, distribution, sale, and licensing of the music catalogs. The company was founded in 2007 and is headquartered in New York, New York.