Financial Analysis: Reading International (NASDAQ:RDI) versus Madison Square Garden (NYSE:MSGS)

Reading International (NASDAQ:RDI) and Madison Square Garden (NYSE:MSGS) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Reading International and Madison Square Garden”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reading International	$202.99 million	0.15	-$14.14 million	($0.77)	-1.71
Madison Square Garden	$1.08 billion	8.24	-$22.44 million	($0.93)	-397.13

Reading International has higher earnings, but lower revenue than Madison Square Garden. Madison Square Garden is trading at a lower price-to-earnings ratio than Reading International, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

44.7% of Reading International shares are owned by institutional investors. Comparatively, 68.9% of Madison Square Garden shares are owned by institutional investors. 32.4% of Reading International shares are owned by company insiders. Comparatively, 19.1% of Madison Square Garden shares 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.

Profitability

This table compares Reading International and Madison Square Garden’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reading International	-8.43%	N/A	-4.03%
Madison Square Garden	-2.07%	N/A	-1.39%

Analyst Ratings

This is a summary of recent recommendations and price targets for Reading International and Madison Square Garden, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reading International	1	0	0	0	1.00
Madison Square Garden	0	6	3	0	2.33

Madison Square Garden has a consensus target price of $357.00, suggesting a potential downside of 3.34%. Given Madison Square Garden’s stronger consensus rating and higher possible upside, analysts clearly believe Madison Square Garden is more favorable than Reading International.

Volatility & Risk

Reading International has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Madison Square Garden has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Summary

Madison Square Garden beats Reading International on 8 of the 13 factors compared between the two stocks.

About Reading International

Reading International, Inc., together with its subsidiaries, focuses on the ownership, development, and operation of entertainment and real property assets in the United States, Australia, and New Zealand. The company operates in two segments, Cinema Exhibition and Real Estate. The Cinema Exhibition segment operates multiplex cinemas. This segment operates its cinema exhibition businesses under the Reading Cinemas, Consolidated Theatres, Angelika Film Center, State Cinema by Angelika, Angelika Anywhere, Event Cinemas, and Rialto Cinemas brands. The Real Estate segment develops, rents, or licenses retail, commercial, and live theater assets. Reading International, Inc. was incorporated in 1999 and is headquartered in New York, New York.

About Madison Square Garden

Madison Square Garden Sports Corp. operates as a professional sports company in the United States. The company owns and operates a portfolio of assets that consists of the New York Knickerbockers of the National Basketball Association (NBA) and the New York Rangers of the National Hockey League. Its other professional franchises include development league teams, the Hartford Wolf Pack of the American Hockey League and the Westchester Knicks of the NBA G League. The company also owns Knicks Gaming, an esports franchise that competes in the NBA 2K League. In addition, it operates professional sports team performance centers, the Madison Square Garden Training Center in Greenburgh. The company was formerly known as The Madison Square Garden Company. Madison Square Garden Sports Corp. was incorporated in 2015 and is based in New York, New York.