Critical Comparison: Eros International PLC (EROS) and World Wrestling Entertainment (WWE)

Eros International PLC (NYSE: EROS) and World Wrestling Entertainment (NYSE:WWE) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Dividends

World Wrestling Entertainment pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. Eros International PLC does not pay a dividend. World Wrestling Entertainment pays out 154.8% 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 current recommendations for Eros International PLC and World Wrestling Entertainment, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eros International PLC 0 0 2 0 3.00
World Wrestling Entertainment 1 2 6 0 2.56

Eros International PLC presently has a consensus price target of $15.00, indicating a potential upside of 22.45%. World Wrestling Entertainment has a consensus price target of $24.43, indicating a potential upside of 10.29%. Given Eros International PLC’s stronger consensus rating and higher possible upside, analysts clearly believe Eros International PLC is more favorable than World Wrestling Entertainment.

Profitability

This table compares Eros International PLC and World Wrestling Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eros International PLC 1.50% 0.41% 0.27%
World Wrestling Entertainment 3.29% 13.07% 5.51%

Valuation and Earnings

This table compares Eros International PLC and World Wrestling Entertainment’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Eros International PLC $252.99 million 2.88 $26.53 million $0.06 204.20
World Wrestling Entertainment $762.15 million 2.24 $81.40 million $0.31 71.45

World Wrestling Entertainment has higher revenue and earnings than Eros International PLC. World Wrestling Entertainment is trading at a lower price-to-earnings ratio than Eros International PLC, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Eros International PLC has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, World Wrestling Entertainment has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Institutional & Insider Ownership

63.9% of Eros International PLC shares are held by institutional investors. Comparatively, 49.5% of World Wrestling Entertainment shares are held by institutional investors. 49.8% of World Wrestling Entertainment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

World Wrestling Entertainment beats Eros International PLC on 10 of the 16 factors compared between the two stocks.

Eros International PLC Company Profile

Eros International Plc (Eros) is a holding company, which serves the Indian film entertainment industry. The Company’s principal activities include the acquisition, co-production and distribution of Indian films and related content. It distributes its film content through the distribution channels, such as theatrical, including multiplex chains and standalone theaters; television syndication, including satellite television broadcasting, cable television and terrestrial television; digital and ancillary, including music, inflight entertainment, home video, Internet protocol television (IPTV), video on demand (VOD), and Internet channels and Eros Now. As of March 31, 2016, its distribution network extends to over 50 countries, such as the United States, the United Kingdom, the Middle East, Germany, Poland, Russia, Romania, Indonesia and Arabic speaking countries. It conducts global operations through its Indian and international subsidiaries, including Eros International Media Limited.

World Wrestling Entertainment Company Profile

World Wrestling Entertainment, Inc. (WWE) is an integrated media and entertainment company. The Company’s segments are Network, Television, Home Entertainment, Digital Media, Live Events, Licensing, Venue Merchandise, WWEShop, WWE Studios, and Corporate and Other. The Company is engaged in the production and distribution of content through various channels, including its WWE Network, television rights agreements, pay-per-view event programming, live events, feature films, licensing of various WWE themed products, and the sale of consumer products featuring its brands. Its Network, Television, Home Entertainment and Digital Media are individual segments that comprise the Media Division. Its Live Events, Licensing, Venue Merchandise and WWEShop are individual segments that comprise the Consumer Products Division. Its Network segment consists of subscriptions to WWE Network. The Company’s Television segment consists of television rights fees and advertising.

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