Reservoir Media (NASDAQ:RSVR – Get Free Report) and Spotify Technology (NYSE:SPOT – Get Free Report) are both communication services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.
Profitability
This table compares Reservoir Media and Spotify Technology’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Reservoir Media | 4.87% | 2.33% | 0.94% |
| Spotify Technology | 18.44% | 41.39% | 23.78% |
Analyst Recommendations
This is a breakdown of current ratings and target prices for Reservoir Media and Spotify Technology, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Reservoir Media | 0 | 3 | 0 | 0 | 2.00 |
| Spotify Technology | 0 | 6 | 17 | 1 | 2.79 |
Insider and Institutional Ownership
44.4% of Reservoir Media shares are held by institutional investors. Comparatively, 84.1% of Spotify Technology shares are held by institutional investors. 26.0% of Reservoir Media shares are held by insiders. Comparatively, 0.4% of Spotify Technology shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Reservoir Media and Spotify Technology”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Reservoir Media | $175.66 million | 3.56 | $8.30 million | $0.13 | 73.00 |
| Spotify Technology | $19.44 billion | 5.40 | $2.50 billion | $16.06 | 31.76 |
Spotify Technology has higher revenue and earnings than Reservoir Media. Spotify Technology is trading at a lower price-to-earnings ratio than Reservoir Media, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Reservoir Media has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Spotify Technology has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.
Summary
Spotify Technology beats Reservoir Media on 13 of the 15 factors compared between the two stocks.
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.
About Spotify Technology
Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. This segment sells directly to the end users. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its users on their computers, tablets, and compatible mobile devices. The company also offers sales, distribution and marketing, contract research and development, and customer and other support services. Spotify Technology S.A. was incorporated in 2006 and is based in Luxembourg City, Luxembourg.
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