DHX Media (NASDAQ: DHXM) and FunctionX (NASDAQ:FNCX) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, valuation, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

1.6% of FunctionX shares are owned by institutional investors. 66.9% of FunctionX shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

DHX Media has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, FunctionX has a beta of -0.62, meaning that its share price is 162% less volatile than the S&P 500.

Earnings & Valuation

This table compares DHX Media and FunctionX’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DHX Media $235.62 million 2.30 $53.05 million $0.07 57.86
FunctionX $3.13 million 0.09 -$10.43 million N/A N/A

DHX Media has higher revenue and earnings than FunctionX.

Dividends

DHX Media pays an annual dividend of $0.06 per share and has a dividend yield of 1.5%. FunctionX does not pay a dividend. DHX Media pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent recommendations for DHX Media and FunctionX, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DHX Media 0 3 4 0 2.57
FunctionX 0 0 0 0 N/A

DHX Media currently has a consensus price target of $9.13, indicating a potential upside of 125.31%. Given DHX Media’s higher possible upside, equities analysts clearly believe DHX Media is more favorable than FunctionX.

Profitability

This table compares DHX Media and FunctionX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DHX Media 4.46% 5.05% 1.91%
FunctionX -228.07% N/A -34.26%

Summary

DHX Media beats FunctionX on 10 of the 13 factors compared between the two stocks.

About DHX Media

DHX Media Ltd is a Canada-based creator, producer, distributor, licensor and broadcaster of kids and family television and film productions. The Company develops, produces and distributes films and television programs for the domestic and international market, broadcasts films and television programs for the domestic markets, as well, the Company manages copyrights, licensing and brands for third parties. It operates through three segments being: Content Business, Copyright Promotions Licensing Group Ltd. (CPLG) and 8504601 Canada Inc. (DHX Television). The Content Business segment includes production, distribution and merchandising operations. The CPLG segment manages copyrights, licensing and brands for third parties. It has five business lines: production (including production service); library and distribution (including digital distribution) of its third party acquired titles; television broadcasting; merchandising and licensing, and new media and interactive.

About FunctionX

Function(x) Inc., formerly DraftDay Fantasy Sports, Inc., is a diversified media and entertainment company. The Company conducts three lines of businesses, which are digital publishing through Wetpaint.com, Inc. (Wetpaint) and Rant, Inc. (Rant); fantasy sports gaming through DraftDay Gaming Group, Inc. (DDGG), and digital content distribution through Choose Digital, Inc. (Choose Digital). The Company’s segments include Wetpaint, which is a media channel reporting original news stories and publishing information content covering television shows, music, celebrities, entertainment news and fashion; Choose Digital, which is a business-to-business platform for delivering digital content; DDGG, which is a business-to-business operator of daily fantasy sports, and Other. The Company’s digital publishing business also includes Rant, which is a digital publisher that publishes original content in over 13 verticals, such as in sports, entertainment, pets, cars and food.

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