Head to Head Analysis: Melco Crown Entertainment Limited (NASDAQ:MLCO) and Caesars Entertainment Corporation (CZR)
Melco Crown Entertainment Limited (NASDAQ: MLCO) and Caesars Entertainment Corporation (NASDAQ:CZR) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitabiliy, institutional ownership, valuation and analyst recommendations.
Insider & Institutional Ownership
40.1% of Melco Crown Entertainment Limited shares are held by institutional investors. Comparatively, 67.5% of Caesars Entertainment Corporation shares are held by institutional investors. 4.6% of Caesars Entertainment Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Melco Crown Entertainment Limited pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Caesars Entertainment Corporation does not pay a dividend. Melco Crown Entertainment Limited pays out 61.5% of its earnings in the form of a dividend.
This is a summary of current recommendations and price targets for Melco Crown Entertainment Limited and Caesars Entertainment Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Melco Crown Entertainment Limited||1||6||9||0||2.50|
|Caesars Entertainment Corporation||0||0||5||0||3.00|
Melco Crown Entertainment Limited currently has a consensus price target of $20.48, indicating a potential downside of 1.53%. Caesars Entertainment Corporation has a consensus price target of $14.90, indicating a potential upside of 23.65%. Given Caesars Entertainment Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Caesars Entertainment Corporation is more favorable than Melco Crown Entertainment Limited.
This table compares Melco Crown Entertainment Limited and Caesars Entertainment Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Melco Crown Entertainment Limited||5.11%||9.20%||3.59%|
|Caesars Entertainment Corporation||-81.33%||N/A||-33.98%|
Risk & Volatility
Melco Crown Entertainment Limited has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500. Comparatively, Caesars Entertainment Corporation has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500.
Valuation & Earnings
This table compares Melco Crown Entertainment Limited and Caesars Entertainment Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Melco Crown Entertainment Limited||$4.92 billion||2.07||$1.11 billion||$0.52||40.00|
|Caesars Entertainment Corporation||$3.89 billion||0.46||$756.00 million||($21.45)||-0.56|
Melco Crown Entertainment Limited has higher revenue and earnings than Caesars Entertainment Corporation. Caesars Entertainment Corporation is trading at a lower price-to-earnings ratio than Melco Crown Entertainment Limited, indicating that it is currently the more affordable of the two stocks.
Melco Crown Entertainment Limited beats Caesars Entertainment Corporation on 10 of the 15 factors compared between the two stocks.
Melco Crown Entertainment Limited Company Profile
Melco Resorts & Entertainment Limited, formerly Melco Crown Entertainment Limited, is a holding company. The Company, through its subsidiaries, develops, owns and operates casino gaming and entertainment casino resort facilities in Asia. It is principally engaged in the gaming and hospitality business in Asia and its principal operating and developmental activities occur in over two geographic areas, which include Macau and the Philippines. Its segments include City of Dreams, Altira Macau, Studio City, Mocha Clubs, City of Dreams Manila, and Corporate and Others. It has over three casino based operations in Macau, namely, City of Dreams, Altira Macau and Studio City, and non-casino based operations in Macau at its Mocha Clubs. It also has a casino based operation in the Philippines, City of Dreams Manila. It is developing the fifth hotel tower at City of Dreams in Cotai, Macau. Its other operations also include Taipa Square Casino, Macau operating within Hotel Taipa Square.
Caesars Entertainment Corporation Company Profile
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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