Alliance Entertainment (NASDAQ:AENT) and BuzzFeed (NASDAQ:BZFD) are both players in the small-cap consumer discretionary sector. A recent analysis compares the two companies across various metrics, including valuation, risk, profitability, and institutional ownership, to determine which may offer better business prospects.
Ownership Structure and Institutional Confidence
Institutional investors hold a mere 0.3% of Alliance Entertainment’s shares, indicating limited confidence among large investors. In contrast, 37.6% of BuzzFeed’s shares are owned by institutional investors, suggesting a stronger belief in BuzzFeed’s long-term growth potential.
Insider ownership paints a different picture. A significant 77.6% of Alliance Entertainment shares are held by company insiders, while BuzzFeed has 19.2% in insider ownership. This high level of insider ownership at Alliance may reflect a strong commitment from those who understand the business best.
Performance Metrics and Earnings Overview
When it comes to financial performance, Alliance Entertainment surpasses BuzzFeed in several key areas. Alliance reported higher gross revenue and earnings per share (EPS), showcasing its stronger financial position. This is crucial given that both companies operate in competitive markets.
In terms of volatility, Alliance Entertainment has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Conversely, BuzzFeed’s beta is remarkably high at 3.43, suggesting that its stock is 243% more volatile than the broader market. Investors typically favor lower volatility as it indicates a more stable investment.
Profitability metrics further highlight the differences between the two companies. Alliance Entertainment shows higher net margins, return on equity, and return on assets, reinforcing its position as the stronger performer.
Overall, the analysis reveals that Alliance Entertainment excels in 11 out of 13 comparison factors against BuzzFeed, indicating a more favorable business outlook.
Company Profiles
Founded in 1990 and headquartered in Plantation, Florida, Alliance Entertainment operates as a wholesaler, distributor, and e-commerce provider for the entertainment industry. The company offers a wide range of products, including vinyl records, video games, and collectibles, and employs a multi-channel strategy for distribution.
BuzzFeed, on the other hand, is a digital media company based in New York, New York. It distributes content across various platforms, including its flagship BuzzFeed site, BuzzFeed News, and Tasty, among others. The company also generates revenue through display, programmatic, and video advertising.
In summary, while both Alliance Entertainment and BuzzFeed operate within the consumer discretionary sector, the analysis indicates that Alliance Entertainment currently represents a stronger investment opportunity based on its financial metrics and ownership structure. Investors may want to consider these factors when evaluating potential investments in these two companies.
