Eldorado Resorts (NASDAQ: ERI) and Golden Entertainment (NASDAQ:GDEN) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Insider and Institutional Ownership

69.4% of Eldorado Resorts shares are held by institutional investors. Comparatively, 27.5% of Golden Entertainment shares are held by institutional investors. 1.2% of Eldorado Resorts shares are held by insiders. Comparatively, 52.0% of Golden Entertainment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Eldorado Resorts -3.38% -8.03% -1.78%
Golden Entertainment 4.29% 6.26% 3.17%

Risk & Volatility

Eldorado Resorts has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Golden Entertainment has a beta of 0.05, indicating that its share price is 95% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Eldorado Resorts and Golden Entertainment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eldorado Resorts 0 0 2 0 3.00
Golden Entertainment 0 1 0 0 2.00

Eldorado Resorts presently has a consensus price target of $25.00, suggesting a potential downside of 0.40%. Given Eldorado Resorts’ stronger consensus rating and higher possible upside, research analysts clearly believe Eldorado Resorts is more favorable than Golden Entertainment.

Earnings & Valuation

This table compares Eldorado Resorts and Golden Entertainment’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Eldorado Resorts N/A N/A N/A ($0.45) -55.78
Golden Entertainment $426.75 million 1.21 $44.77 million $0.80 28.99

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

Summary

Golden Entertainment beats Eldorado Resorts on 6 of the 11 factors compared between the two stocks.

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 Golden Entertainment

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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