Comparing WPP (NYSE:WPP) & National CineMedia (NASDAQ:NCMI)

National CineMedia (NASDAQ:NCMI) and WPP (NYSE:WPP) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Insider & Institutional Ownership

69.5% of National CineMedia shares are owned by institutional investors. Comparatively, 4.3% of WPP shares are owned by institutional investors. 1.4% of National CineMedia shares are owned by company insiders. Comparatively, 1.0% of WPP shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

National CineMedia has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, WPP has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for National CineMedia and WPP, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National CineMedia	1	3	3	0	2.29
WPP	2	4	1	0	1.86

National CineMedia currently has a consensus price target of $5.80, suggesting a potential upside of 76.29%. Given National CineMedia’s stronger consensus rating and higher probable upside, equities analysts clearly believe National CineMedia is more favorable than WPP.

Earnings & Valuation

This table compares National CineMedia and WPP”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National CineMedia	$240.80 million	1.28	-$22.30 million	($0.15)	-21.93
WPP	$18.84 billion	0.21	$692.62 million	N/A	N/A

WPP has higher revenue and earnings than National CineMedia.

Dividends

National CineMedia pays an annual dividend of $0.12 per share and has a dividend yield of 3.6%. WPP pays an annual dividend of $0.96 per share and has a dividend yield of 5.2%. National CineMedia pays out -80.0% of its earnings in the form of a dividend.

Profitability

This table compares National CineMedia and WPP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National CineMedia	-6.39%	-2.67%	-1.99%
WPP	N/A	N/A	N/A

Summary

National CineMedia beats WPP on 8 of the 14 factors compared between the two stocks.

About National CineMedia

National CineMedia, Inc., through its subsidiary, National CineMedia, LLC, operates cinema advertising network in North America. It engages in the sale of advertising to national, regional, and local businesses in Noovie, a cinema advertising and entertainment show seen on movie screens; and sells advertising on its Lobby Entertainment Network, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theatre lobbies. The company also sells online and mobile advertising through its Noovie Audience Accelerator product across a suite of Noovie digital properties, such as Name That Movie and Noovie Trivia app to reach entertainment audiences beyond the theater. It offers its services to third-party theater circuits under long-term network affiliate agreements. The company was incorporated in 2006 and is headquartered in Centennial, Colorado.

About WPP

WPP plc, a creative transformation company, provides communications, experience, commerce, and technology services in North America, the United Kingdom, Western Continental Europe, the Asia Pacific, Latin America, Africa, the Middle East, and Central and Eastern Europe. The company operates through three segments: Global Integrated Agencies, Public Relations, and Specialist Agencies. It offers marketing strategy, creative ideation, production, commerce, influencer marketing, social media management, and technology implementation services; media strategy, planning, buying and activation, commerce media, data analytics, and consulting services; and media management, public affairs, reputation, risk and crisis management, social media management, and strategic advisory services. The company also provides brand consulting, brand identity, product and service design, and corporate and brand publication services. WPP plc was founded in 1985 and is based in London, the United Kingdom.