Financial Review: Core AI (NASDAQ:CHAI) & Warner Music Group (NASDAQ:WMG)

Warner Music Group (NASDAQ:WMG) and Core AI (NASDAQ:CHAI) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Insider and Institutional Ownership

96.9% of Warner Music Group shares are held by institutional investors. Comparatively, 9.9% of Core AI shares are held by institutional investors. 0.1% of Warner Music Group shares are held by insiders. Comparatively, 6.8% of Core AI shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Warner Music Group pays an annual dividend of $0.80 per share and has a dividend yield of 2.8%. Core AI pays an annual dividend of $0.32 per share and has a dividend yield of 118.4%. Warner Music Group pays out 63.5% of its earnings in the form of a dividend. Core AI pays out -16.3% 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. Warner Music Group has raised its dividend for 4 consecutive years. Core AI is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and target prices for Warner Music Group and Core AI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Warner Music Group	0	4	12	0	2.75
Core AI	1	0	0	0	1.00

Warner Music Group presently has a consensus target price of $38.25, suggesting a potential upside of 35.02%. Given Warner Music Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Warner Music Group is more favorable than Core AI.

Earnings and Valuation

This table compares Warner Music Group and Core AI”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Warner Music Group	$7.30 billion	2.03	$365.00 million	$1.26	22.48
Core AI	$52.51 million	0.10	-$31.59 million	($1.96)	-0.14

Warner Music Group has higher revenue and earnings than Core AI. Core AI is trading at a lower price-to-earnings ratio than Warner Music Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Warner Music Group and Core AI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Warner Music Group	9.20%	85.50%	7.00%
Core AI	-68.53%	-226.72%	-69.36%

Risk & Volatility

Warner Music Group has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500. Comparatively, Core AI has a beta of 2.07, meaning that its share price is 107% more volatile than the S&P 500.

Summary

Warner Music Group beats Core AI on 13 of the 17 factors compared between the two stocks.

About Warner Music Group

Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally. It operates through Recorded Music and Music Publishing segments. The Recorded Music segment is involved in the discovery and development of recording artists, as well as related marketing, promotion, distribution, sale, and licensing of music created by such recording artists; markets its music catalog through compilations and reissuances of previously released music and video titles, as well as previously unreleased materials; and conducts its operation primarily through a collection of record labels, such as Warner Records and Atlantic Records, as well as Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Roadrunner, Sire, Spinnin’ Records, Warner Classics, and Warner Music Nashville. This segment markets, distributes, and sells music and video products to retailers and wholesale distributors; independent labels to retail and wholesale distributors; and various distribution centers and ventures, as well as retail outlets, online physical retailers, streaming services, and download services. The Music Publishing segment owns and acquires rights to approximately one million musical compositions comprising pop hits, American standards, folk songs, and motion picture and theatrical compositions. Its catalog includes approximately 150,000 songwriters and composers; and various genres, including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative, and gospel. This segment also administers the music and soundtracks of various third-party television and film producers and studios. The company was founded in 1929 and is headquartered in New York, New York.

About Core AI

Siyata Mobile Inc. develops and provides cellular communications solutions for enterprise customers. It provides connected-vehicle devices and various accessories that are designed for professional fleets, such as trucks, vans, buses, ambulances, government cars, and others. The company also develops, markets, and sells rugged Push-To-Talk (PTT), mobile devices, cellular amplifiers, and various accessories. In addition, it offers 4G LTE devices, such as Uniden UV350 and Uniden CP250, in-vehicle communication devices that incorporate voice, push-to-talk over cellular, navigation, and data fleet management solutions. Further, the company provides cellular booster solutions, such as Uniden U60C 4G and U65C 4G to enhance connectivity; Uniden U70 FN for inside buildings, Uniden UM50 FN for inside vehicles, and the Uniden UM2M FN that can connect to its Uniden UV350 in vehicle communicator; Uniden Mobile Coverage Kit; Mission Critical Push-To-Talk device; and Vehicle Kit 7, a vehicle kit accessory that provides an in-vehicle solution. It serves cellular network operators and their dealers, as well as commercial vehicle technology distributors for fleets in Israel, Europe, Africa, the Middle East, Australia, New Zealand, Canada, and the United States. The company was incorporated in 1986 and is headquartered in Montreal, Canada.