Isle of Capri Casinos (NASDAQ: ISLE) and Melco Crown Entertainment (NASDAQ:MLCO) are both cyclical consumer goods & services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, profitability, institutional ownership, dividends, analyst recommendations and valuation.

Earnings & Valuation

This table compares Isle of Capri Casinos and Melco Crown Entertainment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Isle of Capri Casinos N/A N/A N/A $1.50 15.32
Melco Crown Entertainment $4.52 billion 2.81 $175.90 million $0.62 41.69

Melco Crown Entertainment has higher revenue and earnings than Isle of Capri Casinos. Isle of Capri Casinos is trading at a lower price-to-earnings ratio than Melco Crown Entertainment, indicating that it is currently the more affordable of the two stocks.

Dividends

Melco Crown Entertainment pays an annual dividend of $0.35 per share and has a dividend yield of 1.4%. Isle of Capri Casinos does not pay a dividend. Melco Crown Entertainment pays out 56.5% of its earnings in the form of a dividend.

Profitability

This table compares Isle of Capri Casinos and Melco Crown Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Isle of Capri Casinos 3.12% 21.43% 2.01%
Melco Crown Entertainment 5.92% 12.21% 4.64%

Institutional & Insider Ownership

53.9% of Isle of Capri Casinos shares are owned by institutional investors. Comparatively, 41.5% of Melco Crown Entertainment shares are owned by institutional investors. 38.2% of Isle of Capri Casinos shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Isle of Capri Casinos and Melco Crown Entertainment, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Isle of Capri Casinos 0 0 1 0 3.00
Melco Crown Entertainment 0 2 12 0 2.86

Melco Crown Entertainment has a consensus price target of $25.05, suggesting a potential downside of 3.08%. Given Melco Crown Entertainment’s higher probable upside, analysts plainly believe Melco Crown Entertainment is more favorable than Isle of Capri Casinos.

About Isle of Capri Casinos

Isle of Capri Casinos, Inc. is a developer, owner and operator of branded gaming facilities and related dining, lodging and entertainment facilities in regional markets in the United States. The Company owns or operates over 10 gaming and entertainment facilities in Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri and Pennsylvania. Collectively, these properties feature over 12,000 slot machines and 300 table games (including approximately 80 poker tables), 2,200 hotel rooms and 40 restaurants. The Company also operates a harness racing track at its casino in Florida. The Company operates under two brands: Isle and Lady Luck. The Company’s casino properties include Isle Casino Hotel-Black Hawk, Lady Luck Casino-Black Hawk, Pompano Park, Bettendorf, Marquette, Waterloo, Lake Charles, Lula, Vicksburg, Boonville, Cape Girardeau, Caruthersville, Kansas City and Nemacolin.

About Melco Crown Entertainment

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.

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