Analyzing Cinemark (CNK) and Marcus (MCS)

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

Profitability

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

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

Risk & Volatility

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

Analyst Ratings

This is a summary of recent ratings and target prices for Marcus and Cinemark, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marcus 0 0 3 0 3.00
Cinemark 1 2 6 0 2.56

Marcus currently has a consensus price target of $35.33, suggesting a potential upside of 12.71%. Cinemark has a consensus price target of $41.95, suggesting a potential upside of 7.04%. Given Marcus’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Marcus is more favorable than Cinemark.

Dividends

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

Insider and Institutional Ownership

60.4% of Marcus shares are held by institutional investors. Comparatively, 94.0% of Cinemark shares are held by institutional investors. 32.9% of Marcus shares are held by company insiders. Comparatively, 8.9% of Cinemark shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Marcus and Cinemark’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marcus $622.71 million 1.40 $64.99 million $1.54 20.36
Cinemark $2.99 billion 1.53 $264.18 million $2.26 17.44

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.

Summary

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

About Marcus

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.

About Cinemark

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.

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