Reviewing Dolby Laboratories (DLB) & Cinedigm Corp (NASDAQ:CIDM)

Dolby Laboratories (NYSE: DLB) and Cinedigm Corp (NASDAQ:CIDM) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitabiliy, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Dividends

Dolby Laboratories pays an annual dividend of $0.56 per share and has a dividend yield of 1.1%. Cinedigm Corp does not pay a dividend. Dolby Laboratories pays out 30.3% of its earnings in the form of a dividend. Cinedigm Corp has increased its dividend for 2 consecutive years.

Institutional and Insider Ownership

50.7% of Dolby Laboratories shares are held by institutional investors. Comparatively, 11.1% of Cinedigm Corp shares are held by institutional investors. 43.8% of Dolby Laboratories shares are held by insiders. Comparatively, 27.3% of Cinedigm Corp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Dolby Laboratories and Cinedigm Corp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dolby Laboratories 0 3 2 0 2.40
Cinedigm Corp 0 0 0 0 N/A

Dolby Laboratories currently has a consensus price target of $52.75, suggesting a potential upside of 4.08%. Given Dolby Laboratories’ higher possible upside, equities research analysts clearly believe Dolby Laboratories is more favorable than Cinedigm Corp.

Profitability

This table compares Dolby Laboratories and Cinedigm Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dolby Laboratories 18.34% 9.91% 8.49%
Cinedigm Corp -16.74% N/A -8.69%

Volatility and Risk

Dolby Laboratories has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Cinedigm Corp has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Valuation and Earnings

This table compares Dolby Laboratories and Cinedigm Corp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dolby Laboratories $1.04 billion 5.00 $325.90 million $1.85 27.39
Cinedigm Corp $90.39 million 0.21 $40.28 million ($2.00) -0.78

Dolby Laboratories has higher revenue and earnings than Cinedigm Corp. Cinedigm Corp is trading at a lower price-to-earnings ratio than Dolby Laboratories, indicating that it is currently the more affordable of the two stocks.

Summary

Dolby Laboratories beats Cinedigm Corp on 13 of the 15 factors compared between the two stocks.

Dolby Laboratories Company Profile

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.

Cinedigm Corp Company Profile

Cinedigm Corp. is a distributor and aggregator of independent movie, television and other short form content managing a library of distribution rights to a range of titles and episodes released across various platforms. The Company’s segments include the first digital cinema deployment (Phase I Deployment), the second digital cinema deployment (Phase II Deployment), digital cinema services (Services), and media content and entertainment group (Content & Entertainment). The Phase I Deployment and Phase II Deployment segments are the non-recourse, financing vehicles and administrators for its digital cinema equipment (the Systems) installed in movie theatres. The Services segment provides fee-based support to over 12,000 movie screens in its Phase I Deployment and Phase II Deployment segments. Its Content & Entertainment segment is engaged in ancillary market aggregation and distribution of entertainment content, and branded and curated over-the-top (OTT) digital network business.

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