Head to Head Contrast: MGM Resorts International (MGM) & Caesars Acquisition (NASDAQ:CACQ)
MGM Resorts International (NYSE: MGM) and Caesars Acquisition (NASDAQ:CACQ) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitabiliy and institutional ownership.
This is a breakdown of current ratings and price targets for MGM Resorts International and Caesars Acquisition, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MGM Resorts International||0||1||17||0||2.94|
MGM Resorts International presently has a consensus price target of $34.71, suggesting a potential upside of 6.65%. Given MGM Resorts International’s higher possible upside, equities research analysts plainly believe MGM Resorts International is more favorable than Caesars Acquisition.
Volatility and Risk
MGM Resorts International has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500. Comparatively, Caesars Acquisition has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.
MGM Resorts International pays an annual dividend of $0.44 per share and has a dividend yield of 1.4%. Caesars Acquisition does not pay a dividend. MGM Resorts International pays out 20.4% of its earnings in the form of a dividend.
Earnings and Valuation
This table compares MGM Resorts International and Caesars Acquisition’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MGM Resorts International||$9.56 billion||1.96||$2.26 billion||$2.16||15.07|
MGM Resorts International has higher revenue and earnings than Caesars Acquisition. Caesars Acquisition is trading at a lower price-to-earnings ratio than MGM Resorts International, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
73.7% of MGM Resorts International shares are owned by institutional investors. Comparatively, 52.2% of Caesars Acquisition shares are owned by institutional investors. 12.2% of MGM Resorts International shares are owned by company insiders. Comparatively, 0.2% of Caesars Acquisition shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares MGM Resorts International and Caesars Acquisition’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MGM Resorts International||12.25%||7.76%||2.77%|
MGM Resorts International beats Caesars Acquisition on 9 of the 13 factors compared between the two stocks.
About MGM Resorts International
MGM Resorts International is a holding company. The Company, through its subsidiaries, owns and operates casino resorts. The Company operates in two segments: domestic resorts and MGM China. Its domestic resorts segment consists of non-gaming operations, including hotel, food and beverage, entertainment and other non-gaming amenities. Its casino operations feature a range of slots, table games, and race and sports book wagering. Its MGM China’s operations consist of the MGM Macau resort and casino, and the development of an integrated casino, hotel and entertainment resort on the Cotai Strip in Macau. Under its resort operation, the Company’s casino resorts offer gaming, hotel, convention, dining, entertainment, retail and other resort amenities. It owns Primm Valley Golf Club at the California/Nevada state line and Fallen Oak golf course in Saucier, Mississippi, among others. It owns and manages CityCenter Holdings, LLC, located between Bellagio and Monte Carlo.
About Caesars Acquisition
Caesars Acquisition Company (CAC) owns voting membership units of Caesars Growth Partners, LLC (CGP LLC), a joint venture between CAC and subsidiaries of Caesars Entertainment Corporation (CEC or Caesars Entertainment). CAC serves as CGP LLC’s managing member and sole holder of its outstanding voting units. CGP LLC is a casino asset and entertainment company. Through its relationship with Caesars Entertainment, CGP LLC has the ability to access Caesars Entertainment’s management know-how, brand equity, Total Rewards loyalty program and structural synergies. As of December 31, 2016, CGP LLC’s Interactive Entertainment business consisted of two operating units: The World Series of Poker (WSOP) and regulated online real money gaming (RMG). CGP LLC’s casino properties and developments include Planet Hollywood Resort & Casino in Las Vegas (Planet Hollywood), The LINQ Hotel & Casino, Bally’s Las Vegas, The Cromwell, Horseshoe Baltimore Casino (Horseshoe Baltimore) and Harrah’s New Orleans.
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