Electronic Arts (NASDAQ:EA) and DIRTT Environmental (NASDAQ:DRTT) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations for Electronic Arts and DIRTT Environmental, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Electronic Arts 0 9 20 1 2.73
DIRTT Environmental 0 0 2 0 3.00

Electronic Arts presently has a consensus price target of $130.54, indicating a potential downside of 3.53%. DIRTT Environmental has a consensus price target of $4.75, indicating a potential upside of 313.04%. Given DIRTT Environmental’s stronger consensus rating and higher possible upside, analysts plainly believe DIRTT Environmental is more favorable than Electronic Arts.

Profitability

This table compares Electronic Arts and DIRTT Environmental’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Electronic Arts 54.88% 16.79% 11.16%
DIRTT Environmental N/A N/A N/A

Institutional & Insider Ownership

88.1% of Electronic Arts shares are owned by institutional investors. Comparatively, 38.9% of DIRTT Environmental shares are owned by institutional investors. 0.9% of Electronic Arts shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Electronic Arts and DIRTT Environmental’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Electronic Arts $5.54 billion 7.06 $3.04 billion $4.76 28.43
DIRTT Environmental $247.74 million 0.40 -$4.40 million ($0.05) -23.00

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

Summary

Electronic Arts beats DIRTT Environmental on 12 of the 14 factors compared between the two stocks.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. The company develops and publishes games and services across various genres, such as sports, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, Mass Effect, Need for Speed, The Sims, and Plants v. Zombies brands; and license games from others, such as FIFA, Madden NFL, and Star Wars. It also provides advertisement services on its online Web pages and games; and licenses its game software to third parties. The company markets and sells its games and services through digital distribution channels, as well as through retail channels, such as mass market retailers, electronics specialty stores, and game software specialty stores. Electronic Arts Inc. was founded in 1982 and is headquartered in Redwood City, California.

About DIRTT Environmental

DIRTT Environmental Solutions Ltd. engages in the manufacture of customized interiors. It produces its products by using three dimensional design, configuration and manufacturing software, and in-house manufacturing of its prefabricated interior construction solutions. The company was founded by Geoff Gosling, Barrie Loberg, Kristin Moore, and Mogens F. Smed in 2004 and is headquartered in Calgary, Canada.

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