Dolby Laboratories (NYSE:DLB – Get Free Report) and Sony (NYSE:SONY – Get Free Report) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.
Insider and Institutional Ownership
58.6% of Dolby Laboratories shares are owned by institutional investors. Comparatively, 14.1% of Sony shares are owned by institutional investors. 38.4% of Dolby Laboratories shares are owned by company insiders. Comparatively, 7.0% of Sony shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current recommendations for Dolby Laboratories and Sony, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dolby Laboratories | 0 | 0 | 3 | 0 | 3.00 |
| Sony | 0 | 1 | 4 | 1 | 3.00 |
Dividends
Dolby Laboratories pays an annual dividend of $1.32 per share and has a dividend yield of 1.7%. Sony pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Dolby Laboratories pays out 49.8% of its earnings in the form of a dividend. Sony pays out 8.1% 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. Dolby Laboratories has increased its dividend for 10 consecutive years. Dolby Laboratories is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Dolby Laboratories has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Sony has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.
Earnings & Valuation
This table compares Dolby Laboratories and Sony”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dolby Laboratories | $1.27 billion | 5.69 | $261.83 million | $2.65 | 28.49 |
| Sony | $85.09 billion | 1.82 | $7.53 billion | $1.23 | 20.81 |
Sony has higher revenue and earnings than Dolby Laboratories. Sony is trading at a lower price-to-earnings ratio than Dolby Laboratories, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Dolby Laboratories and Sony’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dolby Laboratories | 19.44% | 11.48% | 9.24% |
| Sony | 8.83% | 13.76% | 3.26% |
Summary
Dolby Laboratories beats Sony on 10 of the 17 factors compared between the two stocks.
About Dolby Laboratories
Dolby Laboratories, Inc. creates audio and imaging technologies that transform entertainment at the cinema, DTV transmissions and devices, mobile devices, OTT video and music services, home entertainment devices, and automobiles. The company develops and licenses its audio technologies, such as AAC & HE-AAC, a digital audio codec solution used for a range of media applications; AVC, a digital video codec with high bandwidth efficiency used in various media devices; Dolby AC-4, a digital audio coding technology that delivers new audio experiences to a range of playback devices; and Dolby Atmos technology for cinema and various media devices. Its audio technologies also include DD, a digital audio coding technology that provides multichannel sound to applications; DD+, a digital audio coding technology that offers audio transmission for a range of media applications and devices; Dolby TrueHD, a digital audio coding technology providing encoding for media application; Dolby Vision, an imaging technology for cinema and media devices; and HEVC, a digital video codec with high bandwidth efficiency for media devices. In addition, the company offers digital cinema servers, cinema processors, amplifiers, loudspeakers, and audio and imaging hardware and software products for the cinema, television, broadcast, communication, and entertainment industries. Further, it provides 3-D glasses and kits; and various services to support theatrical and television production for cinema exhibition, broadcast, and home entertainment. The company serves film studios, content creators, post-production facilities, cinema operators, broadcasters, and video game designers. It sells its products directly to the end users, as well as through dealers and distributors worldwide. Dolby Laboratories, Inc. was founded in 1965 and is headquartered in San Francisco, California.
About Sony
Sony Group Corporation designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets in Japan, the United States, Europe, China, the Asia-Pacific, and internationally. The company distributes software titles and add-on content through digital networks; network services related to game, video, and music content; and home gaming consoles, packaged and game software, and peripheral devices. It also develops, produces, markets, and distributes recorded music; publishes music; and produces and distributes animation titles, game applications, and various services for music and visual products. In addition, the company produces, acquires, and distributes live-action and animated motion pictures for theatrical release, as well as scripted and animated series, unscripted reality or light entertainment, daytime serials, game shows, television movies, and miniseries and other television programs; operation of television networks and direct-to-consumer streaming services; operates a visual effects and animation unit; and manages a studio facility. Further, it researches, develops, designs, produces, markets, distributes, sells, and services televisions, and video and sound products; interchangeable lens, as well as compact digital, and consumer and professional video cameras; projectors and medical equipment; mobile phones, accessories, and applications; and metal oxide semiconductor image sensors, charge-coupled devices, integration systems, and other semiconductors. Additionally, it offers Internet broadband network services; recording media, and storage media products; and life and non-life insurance, banking, and other services, as well as creates and distributes content for PCs and mobile phones. The company was formerly known as Sony Corporation and changed its name to Sony Group Corporation in April 2021. Sony Group Corporation was incorporated in 1946 and is headquartered in Tokyo, Japan.
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