Financial Comparison: Imax (IMAX) and Salem Media Group (SALM)

Imax (NYSE: IMAX) and Salem Media Group (NASDAQ:SALM) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Profitability

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This table compares Imax and Salem Media Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Imax 0.62% 3.52% 2.48%
Salem Media Group 9.34% 2.54% 0.96%

Institutional and Insider Ownership

86.0% of Imax shares are held by institutional investors. Comparatively, 30.5% of Salem Media Group shares are held by institutional investors. 18.9% of Imax shares are held by company insiders. Comparatively, 60.0% of Salem Media Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Imax has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Salem Media Group has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Imax and Salem Media Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Imax 0 4 6 0 2.60
Salem Media Group 0 0 1 0 3.00

Imax currently has a consensus target price of $28.47, indicating a potential upside of 28.83%. Given Imax’s higher probable upside, research analysts plainly believe Imax is more favorable than Salem Media Group.

Valuation and Earnings

This table compares Imax and Salem Media Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Imax $380.77 million 3.77 $2.34 million $0.18 122.78
Salem Media Group $263.74 million 0.33 $24.64 million $0.22 15.23

Salem Media Group has lower revenue, but higher earnings than Imax. Salem Media Group is trading at a lower price-to-earnings ratio than Imax, indicating that it is currently the more affordable of the two stocks.

Dividends

Salem Media Group pays an annual dividend of $0.26 per share and has a dividend yield of 7.8%. Imax does not pay a dividend. Salem Media Group pays out 118.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Imax beats Salem Media Group on 9 of the 16 factors compared between the two stocks.

Imax Company Profile

IMAX Corporation is an entertainment technology company. The Company operates through seven segments: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-production, and other. The IMAX systems segment designs, manufactures, sells or leases IMAX theater projection system equipment. The theater system maintenance segment maintains IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment provides IMAX theater projection system equipment to exhibitors. The film production and IMAX DMR segment produces films and performs film re-mastering services. The film distribution segment distributes films. The film post-production segment provides film post-production and film print services. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items.

Salem Media Group Company Profile

Salem Media Group, Inc., formerly Salem Communications Corporation, is a multi-media company specializing in Christian and Conservative content, with media properties consisting of radio broadcasting, digital media, and book, magazine and newsletter publishing. The Company operates through three segments: Broadcast, Digital Media and Publishing. The Company’s broadcasting segment is engaged in the ownership and operation of radio stations in metropolitan markets. The Company’s radio stations carry national and local programming content, as well as national and local advertisers. The Company’s Digital Media segment focuses on Web-based platform designed for audiences interested in Christian and family-themed content and conservative news. The Company’s publishing segment consists of Regnery Publishing, Xulon Press and Salem Publishing. The Company owns and operates approximately 116 radio stations in over 40 markets.

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