Reviewing Reading International (RDI) & Cinemark (CNK)

Cinemark (NYSE: CNK) and Reading International (NASDAQ:RDI) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Analyst Ratings

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This is a breakdown of recent recommendations for Cinemark and Reading International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cinemark 1 2 7 0 2.60
Reading International 0 0 2 0 3.00

Cinemark presently has a consensus target price of $41.77, indicating a potential upside of 6.75%. Reading International has a consensus target price of $23.50, indicating a potential upside of 43.56%. Given Reading International’s stronger consensus rating and higher possible upside, analysts clearly believe Reading International is more favorable than Cinemark.

Dividends

Cinemark pays an annual dividend of $1.28 per share and has a dividend yield of 3.3%. Reading International does not pay a dividend. Cinemark pays out 56.6% of its earnings in the form of a dividend. Cinemark has increased its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Cinemark and Reading International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cinemark $2.99 billion 1.52 $264.18 million $2.26 17.31
Reading International $279.73 million 1.36 $30.99 million $1.30 12.59

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

Volatility & Risk

Cinemark has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Reading International has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.

Insider & Institutional Ownership

94.0% of Cinemark shares are owned by institutional investors. Comparatively, 36.5% of Reading International shares are owned by institutional investors. 9.2% of Cinemark shares are owned by company insiders. Comparatively, 25.6% of Reading International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Cinemark 8.83% 19.48% 6.01%
Reading International 11.08% 8.22% 3.40%

Summary

Cinemark beats Reading International on 10 of the 17 factors compared between the two stocks.

Cinemark Company Profile

Cinemark Holdings, Inc., together with its subsidiaries, engages in the motion picture exhibition business. It operates theatres in the United States, Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao, and Paraguay. As of December 31, 2017, the company operated 533 theatres and 5,959 screens. Cinemark Holdings, Inc. was incorporated in 2006 and is headquartered in Plano, Texas.

Reading International Company Profile

Reading International, Inc. engages in the ownership, development, and operation of entertainment and real property assets in the United States, Australia, and New Zealand. The company operates in two segments, Theatrical Motion Picture Exhibition (Cinema Exhibition) and Real Estate. The Cinema Exhibition segment operates multiplex cinemas. This segment operates its cinema exhibition businesses under the Reading Cinemas, Angelika Film Centers, Consolidated Theatres, City Cinemas, and Rialto brands. The Real Estate segment owns, develops, rents, or licenses retail, commercial, and live theater assets. As of December 31, 2017, the company had interests in 58 cinemas comprising approximately 473 screens; fee interests in 3 live theaters; fee interest in 1 cinema in New York City; fee interests in 2 cinemas in Australia and 4 cinemas in New Zealand; fee interest in Union Square property; entertainment-themed centers; interest in 70.4 acres of vacant land; interest in 202 acres of vacant land; fee interest in 2 office buildings; and fee ownership of approximately 20.7 million square feet of developed and undeveloped real estate assets. Reading International, Inc. was founded in 1937 and is headquartered in Culver City, California.

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