Critical Comparison: Netflix (NASDAQ:NFLX) and Entravision Communications (NYSE:EVC)

Entravision Communications (NYSE:EVC) and Netflix (NASDAQ:NFLX) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Profitability

This table compares Entravision Communications and Netflix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Entravision Communications	-3.41%	-25.31%	-4.41%
Netflix	28.52%	40.92%	19.79%

Volatility & Risk

Entravision Communications has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500. Comparatively, Netflix has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500.

Valuation & Earnings

This table compares Entravision Communications and Netflix”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Entravision Communications	$447.59 million	1.99	-$79.17 million	($0.22)	-44.07
Netflix	$45.18 billion	7.49	$10.98 billion	$3.10	25.92

Netflix has higher revenue and earnings than Entravision Communications. Entravision Communications is trading at a lower price-to-earnings ratio than Netflix, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Entravision Communications and Netflix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Entravision Communications	1	0	0	0	1.00
Netflix	0	16	34	2	2.73

Netflix has a consensus price target of $114.39, suggesting a potential upside of 42.38%. Given Netflix’s stronger consensus rating and higher probable upside, analysts plainly believe Netflix is more favorable than Entravision Communications.

Institutional & Insider Ownership

69.5% of Entravision Communications shares are owned by institutional investors. Comparatively, 80.9% of Netflix shares are owned by institutional investors. 8.3% of Entravision Communications shares are owned by insiders. Comparatively, 1.2% of Netflix shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Netflix beats Entravision Communications on 13 of the 15 factors compared between the two stocks.

About Entravision Communications

Entravision Communications Corporation operates as an advertising solutions, media, and technology company worldwide. The company operates through three segments: Digital, Television, and Audio. It reaches and engages Hispanics in the United States. The company's portfolio encompasses integrated end-to-end advertising solutions, including digital, television, and audio properties. It also offers a suite of end-to-end digital advertising solutions, including digital commercial partnerships services; and Smadex, a programmatic ad purchasing platform that enables advertisers to purchase advertising electronically and manage data-driven advertising campaigns through online marketplaces. In addition, the company provides a mobile growth solution, such as managed services to advertisers to reach mobile device users; and digital advertising solutions for advertisers. Further, it owns and operates TelevisaUnivision-affiliated television stations. The company operates various television stations; radio stations; and Spanish-language radio stations. Entravision Communications Corporation was founded in 1996 and is headquartered in Santa Monica, California.

About Netflix

Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. It has operations in approximately 190 countries. The company was incorporated in 1997 and is headquartered in Los Gatos, California.