Head-To-Head Analysis: Sony (SNE) and Dolby Laboratories (DLB)

Sony (NYSE: SNE) and Dolby Laboratories (NYSE:DLB) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Volatility & Risk

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Sony has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, Dolby Laboratories has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Institutional and Insider Ownership

7.0% of Sony shares are owned by institutional investors. Comparatively, 53.3% of Dolby Laboratories shares are owned by institutional investors. 7.0% of Sony shares are owned by insiders. Comparatively, 43.8% of Dolby Laboratories 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.

Profitability

This table compares Sony and Dolby Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sony 6.29% 15.00% 2.73%
Dolby Laboratories 6.06% 12.02% 10.15%

Dividends

Sony pays an annual dividend of $0.10 per share and has a dividend yield of 0.2%. Dolby Laboratories pays an annual dividend of $0.64 per share and has a dividend yield of 1.0%. Sony pays out 19.6% of its earnings in the form of a dividend. Dolby Laboratories pays out 29.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sony has raised its dividend for 2 consecutive years and Dolby Laboratories has raised its dividend for 3 consecutive years. Dolby Laboratories is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Sony and Dolby Laboratories, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sony 0 4 2 1 2.57
Dolby Laboratories 0 3 1 0 2.25

Sony currently has a consensus target price of $46.92, indicating a potential downside of 4.51%. Dolby Laboratories has a consensus target price of $62.00, indicating a potential downside of 7.63%. Given Sony’s stronger consensus rating and higher possible upside, equities analysts clearly believe Sony is more favorable than Dolby Laboratories.

Valuation & Earnings

This table compares Sony and Dolby Laboratories’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sony $67.89 billion 0.91 $681.58 million $0.51 96.35
Dolby Laboratories $1.08 billion 6.42 $201.80 million $2.20 30.51

Sony has higher revenue and earnings than Dolby Laboratories. Dolby Laboratories is trading at a lower price-to-earnings ratio than Sony, indicating that it is currently the more affordable of the two stocks.

Summary

Sony beats Dolby Laboratories on 11 of the 18 factors compared between the two stocks.

Sony Company Profile

Sony Corporation designs, develops, manufactures, and sells electronic equipment, instruments, and devices for consumer, professional, and industrial markets worldwide. It offers LCD televisions, optical pickups, mobile phones, tablets, audio equipment and video conference systems, batteries, broadcast and professional-use video equipment, and DVD-players/recorders; and Blu-ray Disc players and recorders, ROMs, CDs, DVDs, and UMDs. The company also provides Internet broadband network services to subscribers, as well as creates and distributes content through its portal services to various electronics product platforms, such as PCs and mobile phones; and interchangeable lens cameras, compact digital cameras, and consumer and professional video cameras, as well as display products comprising projectors and medical equipment. In addition, it offers PlayStation hardware, including home and portable game consoles; network services relating to game, video, and music content; and packaged software and peripheral devices, as well as complementary metal oxide semiconductor image sensors, charge-coupled devices, large-scale integration systems, and other semiconductors. Further, the company produces, acquires, and distributes live-action and animated motion pictures, as well as television programming, including scripted series, daytime serials, game shows, animated series, made for television movies and miniseries, and other programming; operates a visual effects and animation unit; manages a studio facility; and operates television and digital networks. Additionally, it produces and distributes recorded music, animation titles, and game applications; engages in music publishing business; and provides life and non-life insurance, savings products, and loans. The company was formerly known as Tokyo Tsushin Kogyo Kabushiki Kaisha and changed its name to Sony Corporation in January 1958. Sony Corporation was founded in 1946 and is headquartered in Tokyo, Japan.

Dolby Laboratories Company Profile

Dolby Laboratories, Inc. designs and manufactures audio and imaging products for the cinema, television, broadcast and entertainment industries. Its products for cinema include Digital Cinema Servers and Cinema Audio Products, and broadcast and other include Dolby Conference Phone and Other Products. It offers services to support theatrical and television production for cinema exhibition, broadcast and home entertainment, including equipment training and maintenance, mixing room alignment and equalization, as well as audio, color and light image calibration. Its technologies include Advanced Audio Coding and High Efficiency Advanced Audio Coding, Dolby AC-4, Dolby Atmos, Dolby Digital, Dolby Digital Plus, Dolby TrueHD, Dolby Vision, Dolby Voice and High Efficiency Video Coding. It distributes its products in over 80 countries. Its technologies are incorporated in offerings in various end markets, such as the broadcast, Personal Computer, mobile, consumer electronics and other markets.

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