iQIYI (NASDAQ:IQ – Get Free Report) and Reservoir Media (NASDAQ:RSVR – Get Free Report) are both small-cap communication services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.
Insider and Institutional Ownership
52.7% of iQIYI shares are held by institutional investors. Comparatively, 44.4% of Reservoir Media shares are held by institutional investors. 57.8% of iQIYI shares are held by insiders. Comparatively, 26.0% of Reservoir Media shares are held by 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 iQIYI and Reservoir Media’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| iQIYI | -3.24% | -6.29% | -1.78% |
| Reservoir Media | 4.87% | 2.33% | 0.94% |
Risk and Volatility
iQIYI has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, Reservoir Media has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and target prices for iQIYI and Reservoir Media, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| iQIYI | 1 | 4 | 1 | 0 | 2.00 |
| Reservoir Media | 0 | 2 | 0 | 0 | 2.00 |
iQIYI currently has a consensus target price of $1.73, indicating a potential upside of 109.52%. Given iQIYI’s higher possible upside, equities analysts plainly believe iQIYI is more favorable than Reservoir Media.
Earnings & Valuation
This table compares iQIYI and Reservoir Media”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| iQIYI | $3.80 billion | 0.21 | -$29.50 million | ($0.12) | -6.88 |
| Reservoir Media | $175.66 million | 3.57 | $8.30 million | $0.13 | 73.23 |
Reservoir Media has lower revenue, but higher earnings than iQIYI. iQIYI is trading at a lower price-to-earnings ratio than Reservoir Media, indicating that it is currently the more affordable of the two stocks.
Summary
Reservoir Media beats iQIYI on 8 of the 13 factors compared between the two stocks.
About iQIYI
iQIYI, Inc., together with its subsidiaries, provides online entertainment video services in the People's Republic of China. It offers various products and services, including online video, online games, online literature, animations, and other products. The company operates a platform that provides a collection of internet video content, such as professionally produced content licensed from professional content providers and self-produced content. It also offers membership, online advertising, content distribution, and live broadcasting services. In addition, the company operates iQIYI Show, a live broadcasting platform that enables users to follow their favorite hosts and shows in real time through live broadcasting; and iQIYI Lite that offers an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu, Inc.
About Reservoir Media
Reservoir Media, Inc. operates as a music publishing company. It operates through two segments, Music Publishing and Recorded Music. The Music Publishing segment acquires interests in music catalogs, as well as signs songwriters. The Recorded Music segment engages in the acquisition of sound recording catalogs; discovery and development of recording artists; and marketing, distribution, sale, and licensing of the music catalogs. The company was founded in 2007 and is headquartered in New York, New York.
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