Comparing Wynn Resorts, Limited (WYNN) and MGM Resorts International (MGM)
Wynn Resorts, Limited (NASDAQ: WYNN) and MGM Resorts International (NYSE:MGM) are both large-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.
This table compares Wynn Resorts, Limited and MGM Resorts International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Wynn Resorts, Limited||5.02%||165.77%||3.22%|
|MGM Resorts International||9.26%||7.97%||2.85%|
Volatility & Risk
Wynn Resorts, Limited has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, MGM Resorts International has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500.
This is a summary of current ratings and price targets for Wynn Resorts, Limited and MGM Resorts International, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Wynn Resorts, Limited||0||11||9||0||2.45|
|MGM Resorts International||0||1||16||0||2.94|
Wynn Resorts, Limited currently has a consensus target price of $126.57, suggesting a potential downside of 7.00%. MGM Resorts International has a consensus target price of $35.38, suggesting a potential upside of 10.16%. Given MGM Resorts International’s stronger consensus rating and higher possible upside, analysts clearly believe MGM Resorts International is more favorable than Wynn Resorts, Limited.
Wynn Resorts, Limited pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. MGM Resorts International pays an annual dividend of $0.44 per share and has a dividend yield of 1.4%. Wynn Resorts, Limited pays out 74.9% of its earnings in the form of a dividend. MGM Resorts International pays out 26.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Insider and Institutional Ownership
70.8% of Wynn Resorts, Limited shares are held by institutional investors. Comparatively, 75.2% of MGM Resorts International shares are held by institutional investors. 13.2% of Wynn Resorts, Limited shares are held by insiders. Comparatively, 12.2% of MGM Resorts International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Wynn Resorts, Limited and MGM Resorts International’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Wynn Resorts, Limited||$5.42 billion||2.56||$1.25 billion||$2.67||50.97|
|MGM Resorts International||$9.93 billion||1.86||$2.42 billion||$1.69||19.01|
MGM Resorts International has higher revenue and earnings than Wynn Resorts, Limited. MGM Resorts International 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.
About Wynn Resorts, Limited
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.
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.
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