Contrasting Eros International (EROS) and Twenty-First Century Fox (FOXA)

Eros International (NYSE: EROS) and Twenty-First Century Fox (NASDAQ:FOXA) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.

Institutional and Insider Ownership

60.5% of Eros International shares are held by institutional investors. Comparatively, 54.4% of Twenty-First Century Fox shares are held by institutional investors. 20.3% of Twenty-First Century Fox shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Eros International has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Twenty-First Century Fox has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Eros International and Twenty-First Century Fox, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eros International 0 0 2 0 3.00
Twenty-First Century Fox 1 7 13 0 2.57

Eros International currently has a consensus price target of $17.00, indicating a potential upside of 68.32%. Twenty-First Century Fox has a consensus price target of $36.00, indicating a potential downside of 2.23%. Given Eros International’s stronger consensus rating and higher probable upside, research analysts clearly believe Eros International is more favorable than Twenty-First Century Fox.

Valuation & Earnings

This table compares Eros International and Twenty-First Century Fox’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eros International $252.99 million 2.06 $3.80 million N/A N/A
Twenty-First Century Fox $28.50 billion 2.39 $2.95 billion $1.62 22.73

Twenty-First Century Fox has higher revenue and earnings than Eros International.

Dividends

Twenty-First Century Fox pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. Eros International does not pay a dividend. Twenty-First Century Fox pays out 22.2% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Eros International 0.96% 0.22% 0.15%
Twenty-First Century Fox 10.30% 21.41% 7.01%

Summary

Twenty-First Century Fox beats Eros International on 10 of the 15 factors compared between the two stocks.

Eros International Company Profile

Eros International Plc (Eros) is a holding company, which serves the Indian film entertainment industry. The Company’s principal activities include the acquisition, co-production and distribution of Indian films and related content. It distributes its film content through the distribution channels, such as theatrical, including multiplex chains and standalone theaters; television syndication, including satellite television broadcasting, cable television and terrestrial television; digital and ancillary, including music, inflight entertainment, home video, Internet protocol television (IPTV), video on demand (VOD), and Internet channels and Eros Now. As of March 31, 2016, its distribution network extends to over 50 countries, such as the United States, the United Kingdom, the Middle East, Germany, Poland, Russia, Romania, Indonesia and Arabic speaking countries. It conducts global operations through its Indian and international subsidiaries, including Eros International Media Limited.

Twenty-First Century Fox Company Profile

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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