Over the past three months, one of the top performers in the S&P 500 index has been the Entertainment sector (+25.0%).
Some of the largest companies in this industry (by market capitalization): Live Nation Entertainment ($30.7B) – the world’s largest live entertainment company, which has offices in 45 countries and operates 373 stages and entertainment venues and Warner Bros. Discovery ($25.7B), formed in 2022 by the merger of WarnerMedia and Discovery Communications, owns such entertainment media as CNN, TNT, TBS, Discovery and HBO.
According to the latest quarterly reporting data, we analyzed the profitability, strength, and efficiency criteria for each company using the methodology of Stanford University professor Joseph Piotroski.
As we can see, in terms of fundamental data assessment, Live Nation Entertainment is superior to Warner Bros. Discovery in terms of profitability, and Warner Bros. Discovery outperforms its competitor on efficiency.
Over the past 3 months, Live Nation Entertainment shares have declined by -21.4%, while Warner Bros. Discovery rose by +31.0% (the S&P 500 index rose by +3.7%). Warner Bros. Discovery not only outperformed its closest competitor, but also demonstrated better results compared to the index.
So, the winner in this issue is Warner Bros. Discovery. Although Live Nation Entertainment’s business is superior in terms of return on assets, Warner Bros. Discovery’s business outperforms its competitor in terms of operating margin and asset turnover, and its shares show better returns.
* This is not an investment recommendation. It is up to each individual to decide which criteria to favor when making an investment decision, taking into account their goals and individual risk tolerance.
