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

Profitability

This table compares DHX Media and Dolby Laboratories’ 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%
Dolby Laboratories 19.02% 10.25% 8.78%

Volatility & Risk

DHX Media has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Dolby Laboratories has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Institutional & Insider Ownership

51.9% of Dolby Laboratories shares are owned by institutional investors. 43.8% of Dolby Laboratories shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

DHX Media pays an annual dividend of $0.06 per share and has a dividend yield of 1.6%. Dolby Laboratories pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. 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. Dolby Laboratories pays out 28.6% of its earnings in the form of a dividend. DHX Media has increased its dividend for 2 consecutive years. DHX Media is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for DHX Media and Dolby Laboratories, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DHX Media 0 3 4 0 2.57
Dolby Laboratories 0 1 3 0 2.75

DHX Media presently has a consensus price target of $9.13, suggesting a potential upside of 137.01%. Dolby Laboratories has a consensus price target of $58.83, suggesting a potential upside of 2.46%. Given DHX Media’s higher probable upside, equities research analysts plainly believe DHX Media is more favorable than Dolby Laboratories.

Valuation and Earnings

This table compares DHX Media and Dolby Laboratories’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DHX Media $235.62 million 2.19 $53.05 million $0.07 55.00
Dolby Laboratories $1.07 billion 5.51 $340.22 million $1.96 29.30

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

Summary

Dolby Laboratories beats DHX Media on 11 of the 17 factors compared between the two stocks.

DHX Media Company Profile

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.

Dolby Laboratories Company Profile

Dolby Laboratories, Inc. designs and manufactures audio and imaging products for the cinema, television, broadcast and entertainment industries. Its products for cinema include Digital Cinema Servers and Cinema Audio Products, and broadcast and other include Dolby Conference Phone and Other Products. It offers services to support theatrical and television production for cinema exhibition, broadcast and home entertainment, including equipment training and maintenance, mixing room alignment and equalization, as well as audio, color and light image calibration. Its technologies include Advanced Audio Coding and High Efficiency Advanced Audio Coding, Dolby AC-4, Dolby Atmos, Dolby Digital, Dolby Digital Plus, Dolby TrueHD, Dolby Vision, Dolby Voice and High Efficiency Video Coding. It distributes its products in over 80 countries. Its technologies are incorporated in offerings in various end markets, such as the broadcast, Personal Computer, mobile, consumer electronics and other markets.

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