Cinemark (CNK) & Marcus (MCS) Critical Analysis

Cinemark (NYSE: CNK) and Marcus (NYSE:MCS) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Risk & Volatility

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Cinemark has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Marcus has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.

Valuation & Earnings

This table compares Cinemark and Marcus’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cinemark $2.99 billion 1.54 $264.18 million $2.26 17.48
Marcus $622.71 million 1.38 $64.99 million $1.54 20.03

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

Insider & Institutional Ownership

94.0% of Cinemark shares are owned by institutional investors. Comparatively, 60.4% of Marcus shares are owned by institutional investors. 9.1% of Cinemark shares are owned by company insiders. Comparatively, 33.5% of Marcus shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Cinemark pays an annual dividend of $1.28 per share and has a dividend yield of 3.2%. Marcus pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Cinemark pays out 56.6% of its earnings in the form of a dividend. Marcus pays out 39.0% 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. Cinemark has raised its dividend for 2 consecutive years and Marcus has raised its dividend for 6 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Cinemark and Marcus, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cinemark 1 2 7 0 2.60
Marcus 0 0 3 0 3.00

Cinemark presently has a consensus target price of $42.59, suggesting a potential upside of 7.83%. Marcus has a consensus target price of $35.33, suggesting a potential upside of 14.53%. Given Marcus’ stronger consensus rating and higher probable upside, analysts plainly believe Marcus is more favorable than Cinemark.

Profitability

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

Net Margins Return on Equity Return on Assets
Cinemark 8.83% 19.48% 6.01%
Marcus 10.44% 10.48% 4.48%

Summary

Cinemark beats Marcus 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.

Marcus Company Profile

The Marcus Corporation, together with its subsidiaries, owns and operates movie theatres, and hotels and resorts. As of December 28, 2017, the company operated approximately 69 movie theatres with 895 screens in Wisconsin, Illinois, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and Ohio; owned or managed approximately 4,841 hotel and resort rooms; and 19 hotels, resorts, and other properties for third parties in nine states. It also operates a family entertainment center under the Funset Boulevard name in Appleton, Wisconsin, as well as owns and operates a retail outlet under the name of Ronnie's Plaza. In addition, the company provides hospitality management services, including check-in, housekeeping, and maintenance for a vacation ownership development, such as 68 two-room timeshare units and a timeshare sales center. The Marcus Corporation was founded in 1935 and is headquartered in Milwaukee, Wisconsin.

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