Charter Communications (NASDAQ:CHTR) and Netflix (NASDAQ:NFLX) are both large-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.
Risk and Volatility
Charter Communications has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Netflix has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.
Valuation & Earnings
This table compares Charter Communications and Netflix's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Charter Communications | $45.76 billion | 2.75 | $1.67 billion | $7.54 | 83.41 |
Netflix | $20.16 billion | 10.91 | $1.87 billion | $4.13 | 120.58 |
Netflix has lower revenue, but higher earnings than Charter Communications. Charter Communications is trading at a lower price-to-earnings ratio than Netflix, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
70.1% of Charter Communications shares are owned by institutional investors. Comparatively, 79.7% of Netflix shares are owned by institutional investors. 1.2% of Charter Communications shares are owned by insiders. Comparatively, 3.4% of Netflix shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Charter Communications and Netflix, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Charter Communications | 0 | 5 | 19 | 1 | 2.84 |
Netflix | 5 | 10 | 23 | 0 | 2.47 |
Charter Communications currently has a consensus price target of $655.44, suggesting a potential upside of 4.22%. Netflix has a consensus price target of $545.2778, suggesting a potential upside of 9.50%. Given Netflix's higher probable upside, analysts plainly believe Netflix is more favorable than Charter Communications.
Profitability
This table compares Charter Communications and Netflix's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Charter Communications | 5.70% | 7.50% | 1.87% |
Netflix | 11.78% | 31.48% | 7.75% |
Summary
Netflix beats Charter Communications on 10 of the 15 factors compared between the two stocks.