Reading International (RDI) and AMC Entertainment (AMC) Financial Comparison

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

Dividends

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AMC Entertainment pays an annual dividend of $0.80 per share and has a dividend yield of 4.7%. Reading International does not pay a dividend. AMC Entertainment pays out -89.9% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Reading International and AMC Entertainment’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Reading International $279.73 million 1.32 $30.99 million $1.30 12.26
AMC Entertainment $5.08 billion 0.43 -$487.20 million ($0.89) -19.33

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

Profitability

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

Net Margins Return on Equity Return on Assets
Reading International 11.08% 8.22% 3.40%
AMC Entertainment -9.59% -6.04% -1.47%

Volatility and Risk

Reading International has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, AMC Entertainment has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Institutional & Insider Ownership

36.0% of Reading International shares are held by institutional investors. Comparatively, 43.7% of AMC Entertainment shares are held by institutional investors. 25.6% of Reading International shares are held by company insiders. Comparatively, 1.4% of AMC Entertainment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Reading International and AMC Entertainment, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reading International 0 0 2 0 3.00
AMC Entertainment 1 4 8 0 2.54

Reading International presently has a consensus price target of $23.50, indicating a potential upside of 47.43%. AMC Entertainment has a consensus price target of $23.77, indicating a potential upside of 38.21%. Given Reading International’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Reading International is more favorable than AMC Entertainment.

Summary

Reading International beats AMC Entertainment on 11 of the 16 factors compared between the two stocks.

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.

AMC Entertainment Company Profile

AMC Entertainment Holdings, Inc. is a holding company. The Company, through its subsidiaries, including AMC Entertainment Inc. (AMCE), American Multi-Cinema, Inc. (OpCo) and its subsidiaries, is engaged in the theatrical exhibition business. It operates through theatrical exhibition operations segment. It licenses first-run motion pictures from distributors owned by film production companies and from independent distributors. The Company also offers a range of food and beverage items, which include popcorn; soft drinks; candy; hot dogs; specialty drinks, including beers, wine and mixed drinks, and made to order hot foods, including menu choices, such as curly fries, chicken tenders and mozzarella sticks. It operates over 900 theatres with approximately 10,000 screens globally, including over 661 theatres with approximately 8,200 screens in the United States and over 244 theatres with approximately 2,200 screens in Europe. The Company’s subsidiary also includes Carmike Cinemas, Inc.

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