Scientific Games (NASDAQ: SGMS) and Multimedia Games (NASDAQ:MGAM) are both computer and technology 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.

Analyst Ratings

This is a summary of current ratings and price targets for Scientific Games and Multimedia Games, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scientific Games 0 3 2 0 2.40
Multimedia Games 0 0 0 0 N/A

Scientific Games currently has a consensus target price of $42.50, suggesting a potential downside of 20.04%. Given Scientific Games’ higher possible upside, research analysts clearly believe Scientific Games is more favorable than Multimedia Games.

Insider & Institutional Ownership

64.0% of Scientific Games shares are held by institutional investors. 40.6% of Scientific Games shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Scientific Games and Multimedia Games’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scientific Games -10.29% N/A -3.47%
Multimedia Games N/A N/A N/A

Valuation & Earnings

This table compares Scientific Games and Multimedia Games’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Scientific Games $2.88 billion 1.65 -$353.70 million ($3.50) -15.19
Multimedia Games N/A N/A N/A $1.03 35.38

Multimedia Games has lower revenue, but higher earnings than Scientific Games. Scientific Games is trading at a lower price-to-earnings ratio than Multimedia Games, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Scientific Games has a beta of 2.65, indicating that its share price is 165% more volatile than the S&P 500. Comparatively, Multimedia Games has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Summary

Scientific Games beats Multimedia Games on 6 of the 9 factors compared between the two stocks.

Scientific Games Company Profile

Scientific Games Corporation is a developer of technology-based products and services and associated content for the gaming, lottery and interactive gaming industries. Its segments include Gaming, Lottery and Interactive. Its portfolio includes gaming machines and game content, casino management systems, table game products and services, instant and draw-based lottery games, server-based gaming and lottery systems, sports betting technology, lottery content and services, loyalty and rewards programs, interactive gaming and social casino solutions. Gaming segment designs, develops, manufactures, markets and distributes a portfolio of gaming products and services. Lottery segment consists of its systems-based services and product sales business and its instant games business. Its Interactive business segment includes social (non-wagering) gaming and interactive real-money gaming (RMG). Its games are available on Facebook, Amazon.com, the Apple app store and Android app on Google play.

Multimedia Games Company Profile

Multimedia Games Holding Company, Inc. (Multimedia Games), incorporated on August 30, 1991, is engaged in designing, manufacturing and supplying gaming machines and systems to commercial and Native American casino operators in North America, as well as, domestic and selected international lottery operators, and commercial bingo gaming facility operators. The Company’s revenues are generated from the operation of gaming machines in revenue-sharing arrangements and from the sale of gaming machines and systems that features licensed game themes. Multimedia Games places its revenue-sharing machines and sells its gaming machines and systems in Class II, Class III, video lottery terminal (VLT) and electronic bingo settings. The Company has added eTables to its product portfolio with the acquisition of PokerTek, Inc. Additionally, it offers cash access and compliance solutions.

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