Penn National Gaming (NASDAQ: PENN) and Wynn Resorts, Limited (NASDAQ:WYNN) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitabiliy and institutional ownership.

Risk & Volatility

Penn National Gaming has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Wynn Resorts, Limited has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500.

Dividends

Wynn Resorts, Limited pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. Penn National Gaming does not pay a dividend. Wynn Resorts, Limited pays out 76.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Penn National Gaming and Wynn Resorts, Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Penn National Gaming 0 3 7 0 2.70
Wynn Resorts, Limited 0 12 9 0 2.43

Penn National Gaming currently has a consensus target price of $20.22, suggesting a potential downside of 5.10%. Wynn Resorts, Limited has a consensus target price of $124.97, suggesting a potential downside of 5.33%. Given Penn National Gaming’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Penn National Gaming is more favorable than Wynn Resorts, Limited.

Profitability

This table compares Penn National Gaming and Wynn Resorts, Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Penn National Gaming 2.97% -19.08% 2.11%
Wynn Resorts, Limited 5.41% 264.58% 3.20%

Valuation and Earnings

This table compares Penn National Gaming and Wynn Resorts, Limited’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Penn National Gaming $3.03 billion 0.64 $822.61 million $0.99 21.53
Wynn Resorts, Limited $4.94 billion 2.72 $1.10 billion $2.63 50.19

Wynn Resorts, Limited has higher revenue and earnings than Penn National Gaming. Penn National Gaming is trading at a lower price-to-earnings ratio than Wynn Resorts, Limited, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.7% of Penn National Gaming shares are held by institutional investors. Comparatively, 75.3% of Wynn Resorts, Limited shares are held by institutional investors. 11.1% of Penn National Gaming shares are held by company insiders. Comparatively, 13.2% of Wynn Resorts, Limited shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Wynn Resorts, Limited beats Penn National Gaming on 12 of the 16 factors compared between the two stocks.

Penn National Gaming Company Profile

Penn National Gaming, Inc. (Penn) is an owner and manager of gaming and racing facilities, and video gaming terminal operations with a focus on slot machine entertainment. The Company operates through three segments: Northeast, South/West and Midwest. The Northeast segment consists of various properties, including Hollywood Casino at Charles Town Races, Hollywood Casino Bangor, Hollywood Casino at Penn National Race Course and Hollywood Casino Toledo. The South/West segment consists of various properties, such as Zia Park Casino, Hollywood Casino Tunica, Hollywood Casino Gulf Coast, Boomtown Biloxi, M Resort and Tropicana Las Vegas. The Midwest segment consists of various properties, Hollywood Casino Aurora, Hollywood Casino Joliet, Argosy Casino Alton, Argosy Casino Riverside and Hollywood Casino Lawrenceburg. The Other category consists of the Company’s standalone racing operations, including Rosecroft Raceway and Sanford-Orlando Kennel Club.

Wynn Resorts, Limited Company Profile

Wynn Resorts, Limited (Wynn Resorts) is a developer, owner and operator of destination casino resorts that integrate accommodations and a range of amenities, including dining outlets, retail offerings, entertainment theaters and meeting complexes. The Company’s segments include Macau Operations and Las Vegas Operations. The Company’s Macau Operations include Wynn Macau and Wynn Palace. It also includes Encore, an expansion at Wynn Macau. The Company’s Las Vegas Operations include Wynn Las Vegas and Encore, an expansion at Wynn Las Vegas. Wynn Las Vegas is located at the intersection of the Las Vegas Strip and Sands Avenue. As of December 31, 2016, it occupied approximately 215 acres of land fronting the Las Vegas Strip. As of December 31, 2016, the Company owned approximately 18 acres across Sands Avenue. The Company is constructing Wynn Boston Harbor, an integrated casino resort in Everett, Massachusetts.

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