Reviewing Melco Crown Entertainment Limited (MLCO) & Golden Entertainment (NASDAQ:GDEN)
Melco Crown Entertainment Limited (NASDAQ: MLCO) and Golden Entertainment (NASDAQ:GDEN) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.
Risk and Volatility
Melco Crown Entertainment Limited has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500. Comparatively, Golden Entertainment has a beta of 0.04, indicating that its share price is 96% less volatile than the S&P 500.
Melco Crown Entertainment Limited pays an annual dividend of $0.32 per share and has a dividend yield of 1.6%. Golden Entertainment 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 breakdown of current ratings and target prices for Melco Crown Entertainment Limited and Golden Entertainment, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Melco Crown Entertainment Limited||1||5||9||0||2.53|
Melco Crown Entertainment Limited currently has a consensus price target of $20.98, suggesting a potential upside of 4.38%. Golden Entertainment has a consensus price target of $13.00, suggesting a potential downside of 36.43%. Given Melco Crown Entertainment Limited’s stronger consensus rating and higher probable upside, research analysts clearly believe Melco Crown Entertainment Limited is more favorable than Golden Entertainment.
Valuation and Earnings
This table compares Melco Crown Entertainment Limited and Golden Entertainment’s top-line 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||2.00||$1.11 billion||$0.52||38.65|
|Golden Entertainment||$426.75 million||1.07||$44.77 million||$0.80||25.56|
Melco Crown Entertainment Limited has higher revenue and earnings than Golden Entertainment. Golden Entertainment 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.
This table compares Melco Crown Entertainment Limited and Golden Entertainment’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%|
Insider and Institutional Ownership
40.3% of Melco Crown Entertainment Limited shares are owned by institutional investors. Comparatively, 26.7% of Golden Entertainment shares are owned by institutional investors. 52.0% of Golden Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Melco Crown Entertainment Limited beats Golden Entertainment on 12 of the 16 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.
Golden Entertainment Company Profile
Golden Entertainment, Inc. is a group of gaming companies. The Company focuses on distributed gaming, including tavern gaming, and casino and resort operations. It operates through two segments: Distributed Gaming and Casinos. Its Distributed Gaming segment involves the installation, maintenance and operation of gaming and amusement devices in certain strategic, high-traffic, non-casino locations (such as grocery stores, convenience stores, restaurants, bars, taverns, saloons and liquor stores) in Nevada and Montana, and the operation of traditional, branded taverns targeting local patrons, primarily in the greater Las Vegas, Nevada metropolitan area. As of December 31, 2016, its distributed gaming operations consisted of approximately 10,400 gaming devices in approximately 960 locations. Its Casinos segment consists of the Rocky Gap Casino Resort in Flintstone, Maryland and three casinos in Pahrump, Nevada: Pahrump Nugget Hotel Casino, Gold Town Casino and Lakeside Casino & RV Park.
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