Paramount Skydance Corporation (PSKY) vs Warner Music Group Corp. (WMG)

Paramount Skydance Corporation and Warner Music Group Corp. are both Entertainment companies. Warner Music Group Corp. is the larger, with a market value of $14.3B against $11.4B — 1.3× the size. Paramount Skydance Corporation has negative trailing earnings, so its P/E is not meaningful; Warner Music Group Corp. trades at 21.2×. Warner Music Group Corp. grew revenue faster over the last twelve months: 12.9% against 1.23%. Warner Music Group Corp. has the higher net margin (9.20% vs −2.13%) and the higher return on invested capital (12.4% vs 2.62%). Both pay a dividend; Paramount Skydance Corporation yields more (2.86% vs 1.51%). Across the 21 metrics below, Warner Music Group Corp. leads on 12 and Paramount Skydance Corporation on 9.

Valuation

Metric PSKY WMG Entertainment median
P/E n/m 21.20 22.03
P/S 0.38 1.94 1.47
P/B 0.87 14.86 2.00
Price to free cash flow 23.67 16.94 16.60
EV/EBITDA 1.48 12.91 9.65
EV/Sales 0.84 2.50 1.76
Earnings yield (1.54%) 4.72% (0.67%)
Free cash flow yield 4.22% 5.90% 3.26%

Profitability

Metric PSKY WMG Entertainment median
Gross margin 33.33% 45.77% 45.02%
Operating margin 3.70% 13.69% 2.30%
Net margin (2.13%) 9.20% 0.00%
Free cash flow margin 1.61% 11.45% 1.56%
Return on equity (4.15%) 76.15% 0.00%
Return on assets (1.39%) 6.55% 0.00%
Return on invested capital 2.62% 12.39% 0.00%

Growth

Metric PSKY WMG Entertainment median
Revenue growth (TTM) 1.23% 12.91% 5.07%
EPS growth (last fiscal year) 98.76% (16.87%) —
Revenue growth, 5-year CAGR 2.70% 8.49% 10.25%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric PSKY WMG Entertainment median
Debt to equity 1.13 4.94 0.46
Current ratio 1.04 0.73 0.86
Net debt to EBITDA 0.63 3.58 0.72

Dividend

Metric PSKY WMG Entertainment median
Dividend yield 2.86% 1.51% 1.16%
Payout ratio 0.22 0.78 0.00

Size

Metric PSKY WMG Entertainment median
Market cap 11.41b 14.28b 1.87b

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