Dolby Laboratories (NYSE: DLB) and Twenty-First Century Fox (NASDAQ:FOXAV) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Insider and Institutional Ownership

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

Profitability

This table compares Dolby Laboratories and Twenty-First Century Fox’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dolby Laboratories 19.02% 10.25% 8.78%
Twenty-First Century Fox 8.25% 13.07% 4.41%

Earnings and Valuation

This table compares Dolby Laboratories and Twenty-First Century Fox’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dolby Laboratories $1.07 billion 5.58 $340.22 million $1.96 29.68
Twenty-First Century Fox N/A N/A N/A N/A N/A

Dolby Laboratories has higher revenue and earnings than Twenty-First Century Fox.

Dividends

Dolby Laboratories pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. Twenty-First Century Fox does not pay a dividend. Dolby Laboratories pays out 28.6% of its earnings in the form of a dividend. Dolby Laboratories has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Dolby Laboratories and Twenty-First Century Fox, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dolby Laboratories 0 2 3 0 2.60
Twenty-First Century Fox 0 0 0 0 N/A

Dolby Laboratories presently has a consensus target price of $56.88, indicating a potential downside of 2.24%. Given Dolby Laboratories’ higher possible upside, analysts clearly believe Dolby Laboratories is more favorable than Twenty-First Century Fox.

Summary

Dolby Laboratories beats Twenty-First Century Fox on 9 of the 11 factors compared between the two stocks.

About Dolby Laboratories

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.

About Twenty-First Century Fox

Twenty-First Century Fox, Inc. is a media and entertainment company. The Company’s segments include Cable Network Programming; Television; Filmed Entertainment, and Other, Corporate and Eliminations. The Cable Network Programming segment produces and licenses news, business news, sports, general entertainment, factual entertainment and movie programming for distribution. The Television segment is engaged in the operation of broadcast television stations and the broadcasting of network programming in the United States. The Filmed Entertainment segment is engaged in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media, and the production and licensing of television programming around the world. The Other, Corporate and Eliminations segment consists primarily of corporate overhead and eliminations, and other businesses.

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