Eros International PLC (NYSE: EROS) and DHX Media (NASDAQ:DHXM) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitabiliy, dividends, institutional ownership, risk and earnings.

Volatility & Risk

Eros International PLC has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, DHX Media has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Profitability

This table compares Eros International PLC and DHX Media’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%
DHX Media 4.46% 5.05% 1.91%

Institutional and Insider Ownership

69.3% of Eros International PLC shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Eros International PLC $252.99 million 1.53 $26.53 million $0.06 156.69
DHX Media $227.34 million 3.15 $51.19 million $0.07 76.43

DHX Media has higher revenue, but lower earnings than Eros International PLC. DHX Media 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.

Dividends

DHX Media pays an annual dividend of $0.06 per share and has a dividend yield of 1.1%. Eros International PLC 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 Ratings

This is a summary of current recommendations and price targets for Eros International PLC and DHX Media, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eros International PLC 0 1 2 0 2.67
DHX Media 0 0 6 0 3.00

Eros International PLC presently has a consensus target price of $15.00, suggesting a potential upside of 59.57%. DHX Media has a consensus target price of $9.13, suggesting a potential upside of 70.56%. Given DHX Media’s stronger consensus rating and higher probable upside, analysts clearly believe DHX Media is more favorable than Eros International PLC.

Summary

DHX Media beats Eros International PLC on 11 of the 15 factors compared between the two stocks.

About Eros International PLC

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.

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.

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