Eldorado Resorts (NASDAQ: ERI) and Caesars Entertainment Corporation (NASDAQ:CZR) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitabiliy, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Earnings & Valuation

This table compares Eldorado Resorts and Caesars Entertainment Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Eldorado Resorts $880.26 million 1.75 $159.52 million $0.47 43.19
Caesars Entertainment Corporation $3.89 billion 0.47 $756.00 million ($21.45) -0.57

Caesars Entertainment Corporation has higher revenue and earnings than Eldorado Resorts. Caesars Entertainment Corporation is trading at a lower price-to-earnings ratio than Eldorado Resorts, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Eldorado Resorts and Caesars Entertainment Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eldorado Resorts 2.49% 7.95% 1.71%
Caesars Entertainment Corporation -81.33% N/A -33.85%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Eldorado Resorts and Caesars Entertainment Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eldorado Resorts 0 0 3 0 3.00
Caesars Entertainment Corporation 0 0 5 0 3.00

Eldorado Resorts currently has a consensus price target of $22.33, suggesting a potential upside of 10.02%. Caesars Entertainment Corporation has a consensus price target of $14.90, suggesting a potential upside of 21.63%. Given Caesars Entertainment Corporation’s higher probable upside, analysts clearly believe Caesars Entertainment Corporation is more favorable than Eldorado Resorts.

Insider & Institutional Ownership

65.2% of Eldorado Resorts shares are held by institutional investors. Comparatively, 67.5% of Caesars Entertainment Corporation shares are held by institutional investors. 1.2% of Eldorado Resorts shares are held by insiders. Comparatively, 4.6% of Caesars Entertainment Corporation shares are held by 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.

Risk & Volatility

Eldorado Resorts has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Caesars Entertainment Corporation has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

About Eldorado Resorts

Eldorado Resorts, Inc. is a gaming and hospitality company that owns and operates gaming facilities located in Ohio, Louisiana, Nevada, Pennsylvania and West Virginia. The Company’s segments are Nevada, Louisiana, Eastern and Corporate. As of May 1, 2017, the Company owned and operated approximately 503,000 square feet of casino space with approximately 20,000 slot machines and video lottery terminals (VLTs), over 550 table and poker games, 45 restaurants and 6,500 hotel rooms. As of December 31, 2016, the Company owned and operated various properties, including Eldorado Resort Casino Reno (Eldorado Reno), Silver Legacy Resort Casino (Silver Legacy), Circus Circus Reno (Circus Reno), Eldorado Resort Casino Shreveport (Eldorado Shreveport), Mountaineer Casino, Racetrack & Resort (Mountaineer), Presque Isle Downs & Casino (Presque Isle Downs), and Eldorado Gaming Scioto Downs (Scioto Downs).

About Caesars Entertainment Corporation

Caesars Entertainment Corporation is a holding company. The Company provides casino-entertainment and hospitality services. The Company’s segments include Caesars Entertainment Resort Properties, LLC (CERP), Caesars Growth Partners, LLC (CGP) and Other. The Company’s facilities include gaming offerings, food and beverage outlets, hotel and convention space, and non-gaming entertainment options. As of December 31, 2016, the Company, through its consolidated entities, owned 12 casinos in the United States, with over one million square feet of gaming space and approximately 24,000 hotel rooms. As of December 31, 2016, CERP owned six casinos in the United States and The LINQ promenade along with leasing Octavius Tower at Caesars Palace Las Vegas (Octavius Tower) to Caesars Entertainment Operating Company (CEOC) and gaming space at The LINQ promenade to CGP. As of December 31, 2016, CGP owned six casinos in the United States.

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