Comparing Netflix (NASDAQ:NFLX) and Capcom (OTCMKTS:CCOEY)

Capcom (OTCMKTS:CCOEY) and Netflix (NASDAQ:NFLX) are both large-cap communication services companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Volatility and Risk

Capcom has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, Netflix has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500.

Insider and Institutional Ownership

80.9% of Netflix shares are owned by institutional investors. 1.2% of Netflix shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Capcom and Netflix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capcom	0	2	0	0	2.00
Netflix	1	15	35	4	2.76

Netflix has a consensus target price of $94.70, indicating a potential upside of 34.71%. Given Netflix’s stronger consensus rating and higher probable upside, analysts plainly believe Netflix is more favorable than Capcom.

Valuation and Earnings

This table compares Capcom and Netflix”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capcom	$1.30 billion	11.33	$360.28 million	$0.51	27.04
Netflix	$48.37 billion	6.05	$10.98 billion	$3.18	22.11

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

Profitability

This table compares Capcom and Netflix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capcom	30.13%	24.90%	20.58%
Netflix	28.22%	40.02%	19.81%

Summary

Netflix beats Capcom on 11 of the 15 factors compared between the two stocks.

About Capcom

Capcom Co., Ltd. plans, develops, manufactures, sells, and distributes home video games, online games, mobile games, and arcade games in Japan and internationally. It operates through Digital Contents, Arcade Operations, Amusement Equipments, and Other Businesses segments. The Digital Contents segment develops and sells digital game content for consumer home video game platforms, as well as mobile content and PC online games. The Arcade Operations segment operates Plaza Capcom amusement facilities primarily in commercial complexes, as well as hosts various events. The Amusement Equipments segment is involved in the development, manufacture, and sale of software, frames and LCD devices for gaming machines. The Other Businesses segment engages in the adapting game content into movies, animated television programs, music CDs, and merchandise; and devoting resources to esports. Capcom Co., Ltd. was incorporated in 1979 and is headquartered in Osaka, Japan.

About Netflix

Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. It has operations in approximately 190 countries. The company was incorporated in 1997 and is headquartered in Los Gatos, California.