Financial Review: Cinemark Holdings (CNK) and AMC Entertainment Holdings (NYSE:AMC)

Cinemark Holdings (NYSE: CNK) and AMC Entertainment Holdings (NYSE:AMC) are both cyclical consumer goods & services companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings and target prices for Cinemark Holdings and AMC Entertainment Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cinemark Holdings 3 4 6 0 2.23
AMC Entertainment Holdings 1 4 10 0 2.60

Cinemark Holdings presently has a consensus price target of $43.14, suggesting a potential upside of 16.75%. AMC Entertainment Holdings has a consensus price target of $29.60, suggesting a potential upside of 110.71%. Given AMC Entertainment Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe AMC Entertainment Holdings is more favorable than Cinemark Holdings.

Dividends

Cinemark Holdings pays an annual dividend of $1.16 per share and has a dividend yield of 3.1%. AMC Entertainment Holdings pays an annual dividend of $0.80 per share and has a dividend yield of 5.7%. Cinemark Holdings pays out 49.6% of its earnings in the form of a dividend. AMC Entertainment Holdings pays out -125.0% 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. AMC Entertainment Holdings is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Cinemark Holdings has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, AMC Entertainment Holdings has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Institutional and Insider Ownership

89.0% of Cinemark Holdings shares are owned by institutional investors. Comparatively, 42.0% of AMC Entertainment Holdings shares are owned by institutional investors. 9.2% of Cinemark Holdings shares are owned by insiders. Comparatively, 0.8% of AMC Entertainment Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Cinemark Holdings and AMC Entertainment Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cinemark Holdings 6.90% 15.46% 4.76%
AMC Entertainment Holdings -2.49% -3.44% -0.89%

Valuation & Earnings

This table compares Cinemark Holdings and AMC Entertainment Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cinemark Holdings $3.00 billion 1.43 $678.63 million $2.34 15.79
AMC Entertainment Holdings $4.19 billion 0.44 $644.04 million ($0.64) -21.95

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

Summary

Cinemark Holdings beats AMC Entertainment Holdings on 8 of the 15 factors compared between the two stocks.

Cinemark Holdings Company Profile

Cinemark Holdings, Inc. is engaged in the motion picture exhibition business with theatres in the United States (U.S.), Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Paraguay, Curacao and Bolivia. The Company manages its business in two segments: U.S. markets and international markets. The international segment consists of operations in Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. As of December 31, 2016, the Company operated 526 theatres and 5,903 screens in the United States and Latin America. As of December 31, 2016, its the United States circuit had 339 theatres and 4,559 screens in 41 states and its international circuit had 187 theatres and 1,344 screens in 15 countries. It develops new platforms for its theatre circuit, such as XD, Cinemark Reserve, Luxury Lounger reclining seats, CineArts and other concepts.

AMC Entertainment Holdings 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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