iHeartMedia (OTCMKTS:IHRTQ) and Spotify Technology (NYSE:SPOT) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Analyst Ratings

This is a summary of recent ratings and price targets for iHeartMedia and Spotify Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
iHeartMedia 0 0 0 0 N/A
Spotify Technology 1 0 3 0 2.50

Spotify Technology has a consensus target price of $172.33, suggesting a potential upside of 13.15%. Given Spotify Technology’s higher possible upside, analysts clearly believe Spotify Technology is more favorable than iHeartMedia.

Institutional and Insider Ownership

0.4% of iHeartMedia shares are owned by institutional investors. Comparatively, 45.4% of Spotify Technology shares are owned by institutional investors. 21.9% of iHeartMedia shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

iHeartMedia has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Spotify Technology has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500.

Valuation & Earnings

This table compares iHeartMedia and Spotify Technology’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
iHeartMedia $6.33 billion 0.01 -$201.91 million N/A N/A
Spotify Technology $6.21 billion 4.37 -$92.11 million ($0.60) -253.83

Spotify Technology has lower revenue, but higher earnings than iHeartMedia.

Profitability

This table compares iHeartMedia and Spotify Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
iHeartMedia 1.59% -0.90% 0.83%
Spotify Technology -1.08% 13.72% 5.62%

Summary

Spotify Technology beats iHeartMedia on 8 of the 12 factors compared between the two stocks.

iHeartMedia Company Profile

iHeartMedia, Inc. operates as a media and entertainment company worldwide. It operates through three segments: iHeartMedia (iHM), Americas Outdoor Advertising (Americas Outdoor), and International Outdoor Advertising (International Outdoor). The iHM segment offers radio broadcasting, digital, mobile, podcasts, social, live events, mobile platforms and products, program syndication, traffic, weather, news and sports data distribution, and on-demand entertainment; and operates Premiere Networks, a national radio network that produces, distributes, or represents approximately 100 syndicated radio programs serving approximately 6,000 radio station affiliates. It also delivers real-time traffic and weather information through navigation systems, radio and television broadcast media, and wireless and Internet-based services; and curates, promotes, produces, and televises live music events for listeners and advertising partners. As of December 31, 2018, this segment owned 848 radio stations, which included 239 AM and 609 FM radio stations. The Americas Outdoor segment owns or operates display structures comprising printed and digital billboards, street furniture and transit displays, airport displays and wallscapes, and other spectaculars focusing on metropolitan areas. This segment owned or operated approximately 79,000 display structures. The International Outdoor segment owns or operates displays, such as street furniture, billboards, transit and retail displays, public bike programs, and other spectaculars. This segment owned and operated approximately 380,000 displays. The company was formerly known as CC Media Holdings, Inc. and changed its name to iHeartMedia, Inc. in September 2014. iHeartMedia, Inc. was founded in 1972 and is headquartered in San Antonio, Texas. On March 14, 2018 iHeartMedia, Inc. along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

Spotify Technology Company Profile

Spotify Technology S.A., together with its subsidiaries, provides music streaming services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers commercial-free music services to subscribers comprising unlimited online and offline high-quality streaming access to its catalog. The Ad-Supported segment provides ad-supported users with limited on-demand online access to its catalog. As of December 31, 2018, the company's platform included 207 million monthly active users and 96 million premium subscribers in approximately 78 countries and territories. Spotify Technology S.A. was founded in 2006 and is based in Luxembourg City, Luxembourg.

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