Financial Contrast: iHeartMedia (NASDAQ:IHRT) and National CineMedia (NASDAQ:NCMI)

National CineMedia (NASDAQ:NCMI) and iHeartMedia (NASDAQ:IHRT) are both small-cap communication services companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Insider and Institutional Ownership

69.5% of National CineMedia shares are owned by institutional investors. Comparatively, 93.9% of iHeartMedia shares are owned by institutional investors. 1.7% of National CineMedia shares are owned by insiders. Comparatively, 10.2% of iHeartMedia shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares National CineMedia and iHeartMedia”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National CineMedia	$243.20 million	0.72	-$10.60 million	($0.09)	-20.67
iHeartMedia	$3.86 billion	0.03	-$472.87 million	($1.82)	-0.38

National CineMedia has higher earnings, but lower revenue than iHeartMedia. National CineMedia is trading at a lower price-to-earnings ratio than iHeartMedia, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares National CineMedia and iHeartMedia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National CineMedia	-3.05%	-1.31%	-0.99%
iHeartMedia	-5.68%	N/A	-3.29%

Analyst Ratings

This is a breakdown of current recommendations for National CineMedia and iHeartMedia, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National CineMedia	1	2	3	0	2.33
iHeartMedia	3	1	0	0	1.25

National CineMedia currently has a consensus target price of $4.20, indicating a potential upside of 125.81%. iHeartMedia has a consensus target price of $4.25, indicating a potential upside of 507.06%. Given iHeartMedia’s higher probable upside, analysts clearly believe iHeartMedia is more favorable than National CineMedia.

Risk and Volatility

National CineMedia has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, iHeartMedia has a beta of 2.47, indicating that its share price is 147% more volatile than the S&P 500.

About National CineMedia

National CineMedia, Inc. (NASDAQ: NCMI) is a media and advertising company focused on cinema-based marketing in the United States. Through its network of movie theaters, the company sells advertising opportunities that allow brands to reach audiences before feature films and throughout the theater environment. Its primary product is the Noovie pre-show, a branded entertainment and advertising program shown on theater screens before movies. National CineMedia also offers on-screen advertising, lobby and other in-theater placements, digital and experiential campaigns, and related marketing solutions designed to connect advertisers with moviegoers.

About iHeartMedia

iHeartMedia is an audio media company whose businesses include broadcast radio, digital audio, podcasting, live events and advertising services. Its radio programming spans music, news, talk and sports, while its digital offerings include the iHeartRadio platform and a broad selection of podcasts. The company serves audiences and advertisers primarily in the United States. Its services also include audio advertising and marketing solutions that connect brands with listeners across broadcast and digital channels. iHeartMedia traces its roots to radio broadcasting in San Antonio and operated for many years as Clear Channel Communications.