National CineMedia (NASDAQ:NCMI – Get Free Report) and Optimum Communications (NYSE:OPTU – Get Free Report) are both small-cap communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.
Insider and Institutional Ownership
69.5% of National CineMedia shares are owned by institutional investors. Comparatively, 54.8% of Optimum Communications shares are owned by institutional investors. 1.7% of National CineMedia shares are owned by company insiders. Comparatively, 43.4% of Optimum Communications shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares National CineMedia and Optimum Communications’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National CineMedia | -10.69% | 7.62% | 5.72% |
| Optimum Communications | -74.12% | N/A | -10.81% |
Valuation and Earnings
This table compares National CineMedia and Optimum Communications”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National CineMedia | $243.20 million | 0.72 | -$10.60 million | ($0.09) | -20.67 |
| Optimum Communications | $8.27 billion | 0.02 | -$1.87 billion | ($10.39) | -0.07 |
National CineMedia has higher earnings, but lower revenue than Optimum Communications. National CineMedia is trading at a lower price-to-earnings ratio than Optimum Communications, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for National CineMedia and Optimum Communications, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National CineMedia | 1 | 2 | 4 | 0 | 2.43 |
| Optimum Communications | 4 | 5 | 0 | 0 | 1.56 |
National CineMedia presently has a consensus target price of $4.17, suggesting a potential upside of 124.01%. Optimum Communications has a consensus target price of $0.92, suggesting a potential upside of 32.85%. Given National CineMedia’s stronger consensus rating and higher probable upside, equities research analysts clearly believe National CineMedia is more favorable than Optimum Communications.
Volatility & Risk
National CineMedia has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, Optimum Communications has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.
Summary
National CineMedia beats Optimum Communications on 11 of the 14 factors compared between the two stocks.
About National CineMedia
National CineMedia, Inc. (NASDAQ: NCMI) is a media and advertising company focused on cinema-based marketing in the United States. Through its network of movie theaters, the company sells advertising opportunities that allow brands to reach audiences before feature films and throughout the theater environment. Its primary product is the Noovie pre-show, a branded entertainment and advertising program shown on theater screens before movies. National CineMedia also offers on-screen advertising, lobby and other in-theater placements, digital and experiential campaigns, and related marketing solutions designed to connect advertisers with moviegoers.
About Optimum Communications
Optimum Communications, Inc., formerly known as Altice USA, is a telecommunications company that provides broadband, video, voice and mobile services to residential and business customers. Its offerings include high-speed internet over cable and fiber networks, television packages, phone service and wireless plans marketed under the Optimum brand. The company also operates News 12, a group of regional news networks, and provides advertising services. Its network and customer base span communities in multiple U.S. states, with a strong presence in the Northeast and additional markets elsewhere.
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