Contrasting Cinemark Holdings (CNK) and Regal Entertainment Group (RGC)
Cinemark Holdings (NYSE: CNK) and Regal Entertainment Group (NYSE:RGC) are both mid-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitabiliy and analyst recommendations.
Insider & Institutional Ownership
89.4% of Cinemark Holdings shares are held by institutional investors. Comparatively, 76.8% of Regal Entertainment Group shares are held by institutional investors. 9.2% of Cinemark Holdings shares are held by insiders. Comparatively, 2.0% of Regal Entertainment Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Cinemark Holdings and Regal Entertainment Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cinemark Holdings||$2.99 billion||1.60||$682.09 million||$2.36||17.56|
|Regal Entertainment Group||$3.23 billion||1.04||$597.40 million||$1.13||18.95|
Cinemark Holdings has higher revenue, but lower earnings than Regal Entertainment Group. Cinemark Holdings is trading at a lower price-to-earnings ratio than Regal Entertainment Group, indicating that it is currently the more affordable of the two stocks.
Cinemark Holdings pays an annual dividend of $1.16 per share and has a dividend yield of 2.8%. Regal Entertainment Group pays an annual dividend of $0.88 per share and has a dividend yield of 4.1%. Cinemark Holdings pays out 49.2% of its earnings in the form of a dividend. Regal Entertainment Group pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Cinemark Holdings and Regal Entertainment Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Regal Entertainment Group||5.51%||-21.38%||7.00%|
This is a summary of current ratings and recommmendations for Cinemark Holdings and Regal Entertainment Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Regal Entertainment Group||3||3||6||1||2.38|
Cinemark Holdings presently has a consensus target price of $44.12, suggesting a potential upside of 6.47%. Regal Entertainment Group has a consensus target price of $25.60, suggesting a potential upside of 19.55%. Given Regal Entertainment Group’s stronger consensus rating and higher possible upside, analysts clearly believe Regal Entertainment Group is more favorable than Cinemark Holdings.
Volatility and Risk
Cinemark Holdings has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Regal Entertainment Group has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.
Cinemark Holdings beats Regal Entertainment Group on 9 of the 17 factors compared between the two stocks.
About Cinemark Holdings
Cinemark Holdings, Inc. is engaged in the motion picture exhibition business with theatres in the United States (U.S.), Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Paraguay, Curacao and Bolivia. The Company manages its business in two segments: U.S. markets and international markets. The international segment consists of operations in Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. As of December 31, 2016, the Company operated 526 theatres and 5,903 screens in the United States and Latin America. As of December 31, 2016, its the United States circuit had 339 theatres and 4,559 screens in 41 states and its international circuit had 187 theatres and 1,344 screens in 15 countries. It develops new platforms for its theatre circuit, such as XD, Cinemark Reserve, Luxury Lounger reclining seats, CineArts and other concepts.
About Regal Entertainment Group
Regal Entertainment Group is an operator of theatre circuits in the United States. As of March 31, 2017, the Company operated 7,262 screens in 559 theatres in 43 states along with Guam, Saipan, American Samoa and the District of Columbia. The Company manages its business under theatre exhibition operations segment. The Company develops, acquires and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of metropolitan markets throughout the United States. The Company operates multi-screen theatres. The Company is the parent company of Regal Entertainment Holdings, Inc. (REH), which is the parent company of Regal Cinemas Corporation (Regal Cinemas) and its subsidiaries. Regal Cinemas’ subsidiaries include Regal Cinemas, Inc. (RCI) and its subsidiaries, which include Edwards Theatres, Inc. (Edwards), Regal CineMedia Corporation (RCM) and United Artists Theatre Company (United Artists).
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