Critical Analysis: Skydance (NYSE:SKYD) & Cinemark (NYSE:CNK)

Cinemark (NYSE:CNK) and Skydance (NYSE:SKYD) are both mid-cap communication services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Profitability

This table compares Cinemark and Skydance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cinemark	6.44%	50.94%	4.88%
Skydance	-2.13%	4.11%	1.21%

Volatility & Risk

Cinemark has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Skydance has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500.

Insider and Institutional Ownership

73.0% of Skydance shares are held by institutional investors. 2.4% of Cinemark shares are held by insiders. Comparatively, 0.4% of Skydance shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Cinemark and Skydance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cinemark	$3.12 billion	1.45	$138.20 million	$1.69	23.11
Skydance	$28.89 billion	0.29	-$621.00 million	$0.29	25.62

Cinemark has higher earnings, but lower revenue than Skydance. Cinemark is trading at a lower price-to-earnings ratio than Skydance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for Cinemark and Skydance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cinemark	0	5	9	1	2.73
Skydance	8	7	8	0	2.00

Cinemark currently has a consensus target price of $38.43, indicating a potential downside of 1.60%. Skydance has a consensus target price of $6.02, indicating a potential downside of 19.02%. Given Cinemark’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Cinemark is more favorable than Skydance.

Dividends

Cinemark pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Skydance pays an annual dividend of $0.20 per share and has a dividend yield of 2.7%. Cinemark pays out 21.3% of its earnings in the form of a dividend. Skydance pays out 69.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Cinemark beats Skydance on 12 of the 16 factors compared between the two stocks.

About Cinemark

Cinemark Holdings, Inc., together with its subsidiaries, engages in the motion picture exhibition business. As of February 16, 2024, it operated 501 theatres with 5,719 screens in 42 states and 13 countries in South and Central America. Cinemark Holdings, Inc. was founded in 1984 and is headquartered in Plano, Texas.

About Skydance

Paramount Global is a media and entertainment company which creates premium content and experiences for audiences. The company’s portfolio of consumer brands includes CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount , Pluto TV and Simon & Schuster, among others. Paramount Global, formerly known as ViacomCBS Inc., is based in NEW YORK.