Head-to-head analysis of Warner Music Group (WMG) and its rivals


Warner Music Group (NASDAQ: WMGGet a rating) is one of 34 SOEs in the Entertainment & Leisure Services sector, but how does it stand out from its competitors? We will compare Warner Music Group to related companies based on its risk strength, profitability, analyst recommendations, earnings, valuation, institutional ownership and dividends.

Profitability

This table compares the net margins, return on equity and return on assets of Warner Music Group and its competitors.

Net margins Return on equity return on assets
Warner Music Group 6.45% 362.14% 5.86%
Warner Music Group Competitors -2,733.84% -2.38% -207.36%

Institutional and insider ownership

22.3% of Warner Music Group shares are held by institutional investors. In comparison, 34.0% of the shares of all “Amusement and recreation services” companies are held by institutional investors. 76.6% of Warner Music Group shares are held by insiders. By comparison, 29.4% of the shares of all “Amusement and Leisure Services” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds, and large money managers believe a company is poised for long-term growth.

Dividends

Warner Music Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. Warner Music Group pays 84.5% of its earnings as a dividend, suggesting it may not have enough earnings to cover its dividend payment in the future. As a group, the “amusement and leisure services” companies pay a dividend yield of 1.9% and pay out -573.3% of their earnings as a dividend. Warner Music Group has increased its dividend for 1 consecutive years.

Valuation and benefits

This table compares the gross revenue, earnings per share (EPS) and valuation of Warner Music Group and its competitors.

Gross revenue Net revenue Price/earnings ratio
Warner Music Group $5.30 billion $304.00 million 41.11
Warner Music Group Competitors $914.79 million -75.39 million dollars 63.55

Warner Music Group has higher revenues and profits than its competitors. Warner Music Group trades at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Warner Music Group has a beta of 1.32, suggesting its stock price is 32% more volatile than the S&P 500. Comparatively, Warner Music Group’s competitors have a beta of -0.49, suggesting that their average price is 149% less volatile than the S&P 500. S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Warner Music Group and its competitors, as reported by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Warner Music Group 2 1 8 0 2.55
Warner Music Group Competitors 73 270 379 ten 2.45

Warner Music Group currently has a consensus price target of $44.00, suggesting a potential upside of 50.74%. As a group, “amusement and recreation services” companies have an upside potential of 68.38%. Since Warner Music Group’s competitors have higher growth potential, analysts clearly believe that Warner Music Group has less favorable growth aspects than its competitors.

Summary

Warner Music Group beats its competitors on 10 of the 15 factors compared.

Warner Music Group Company Profile (Get a rating)

Warner Music Group Corp. operates as a music entertainment company in the United States, United Kingdom, Germany and internationally. The Company operates through the Recorded Music and Music Publishing segments. The Recorded Music segment is involved in the discovery and development of recording artists, as well as the related marketing, promotion, distribution, sale and licensing of music created by such recording artists; markets its music catalog through compilations and reissues of previously released music and video titles, as well as unreleased content; and operates 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; from independent labels to retail and wholesale distributors; and various distribution centers and businesses, as well as retail outlets, physical online retailers, streaming services, and download services. The Music Publishing segment owns and acquires the rights to approximately one million musical compositions including pop hits, American standards, folk songs, and film and theatrical compositions. Its catalog includes approximately 100,000 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 music and soundtracks from various third-party television and film producers and studios. The company was founded in 1929 and is headquartered in New York, New York.



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