Financial Contrast: Warner Music Group (WMG) versus The Competition

Warner Music Group (NASDAQ:WMGGet Rating) is one of 33 public companies in the “Amusement & recreation services” industry, but how does it compare to its rivals? We will compare Warner Music Group to similar businesses based on the strength of its dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.

Volatility & Risk

Warner Music Group has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, Warner Music Group’s rivals have a beta of -0.33, indicating that their average share price is 133% less volatile than the S&P 500.

Earnings & Valuation

This table compares Warner Music Group and its rivals revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Warner Music Group $5.30 billion $304.00 million 42.83
Warner Music Group Competitors $996.05 million -$74.95 million 64.05

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

Insider and Institutional Ownership

22.3% of Warner Music Group shares are owned by institutional investors. Comparatively, 34.7% of shares of all “Amusement & recreation services” companies are owned by institutional investors. 76.6% of Warner Music Group shares are owned by company insiders. Comparatively, 25.2% of shares of all “Amusement & recreation services” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Warner Music Group and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Warner Music Group 2 1 8 0 2.55
Warner Music Group Competitors 73 273 383 10 2.45

Warner Music Group currently has a consensus price target of $44.00, suggesting a potential upside of 44.69%. As a group, “Amusement & recreation services” companies have a potential upside of 49.87%. Given Warner Music Group’s rivals higher possible upside, analysts clearly believe Warner Music Group has less favorable growth aspects than its rivals.

Dividends

Warner Music Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. Warner Music Group pays out 84.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Amusement & recreation services” companies pay a dividend yield of 1.8% and pay out -373.9% of their earnings in the form of a dividend. Warner Music Group has increased its dividend for 1 consecutive years.

Profitability

This table compares Warner Music Group and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Warner Music Group 6.45% 362.14% 5.86%
Warner Music Group Competitors -2,737.81% -1.13% -206.04%

Summary

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

About Warner Music Group (Get Rating)

Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally. The company 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 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 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.

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