Monarch Casino & Resort (MCRI) & Melco Resorts & Entertainment (MLCO) Head-To-Head Contrast

Monarch Casino & Resort (NASDAQ: MLCO) and Melco Resorts & Entertainment (NASDAQ:MLCO) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Earnings & Valuation

This table compares Monarch Casino & Resort and Melco Resorts & Entertainment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monarch Casino & Resort $230.73 million 3.51 $25.53 million $1.47 30.78
Melco Resorts & Entertainment $5.28 billion 1.92 $347.00 million $0.92 22.36

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

Risk and Volatility

Monarch Casino & Resort has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Melco Resorts & Entertainment has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500.

Dividends

Melco Resorts & Entertainment pays an annual dividend of $0.57 per share and has a dividend yield of 2.8%. Monarch Casino & Resort does not pay a dividend. Melco Resorts & Entertainment pays out 62.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Monarch Casino & Resort and Melco Resorts & Entertainment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monarch Casino & Resort 0 2 2 0 2.50
Melco Resorts & Entertainment 0 1 9 0 2.90

Monarch Casino & Resort currently has a consensus target price of $48.50, suggesting a potential upside of 7.18%. Melco Resorts & Entertainment has a consensus target price of $32.35, suggesting a potential upside of 57.27%. Given Melco Resorts & Entertainment’s stronger consensus rating and higher possible upside, analysts plainly believe Melco Resorts & Entertainment is more favorable than Monarch Casino & Resort.

Insider and Institutional Ownership

59.4% of Monarch Casino & Resort shares are held by institutional investors. Comparatively, 40.5% of Melco Resorts & Entertainment shares are held by institutional investors. 26.2% of Monarch Casino & Resort shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Monarch Casino & Resort and Melco Resorts & Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monarch Casino & Resort 12.50% 11.47% 9.00%
Melco Resorts & Entertainment 7.83% 15.47% 5.86%

Monarch Casino & Resort Company Profile

Monarch Casino & Resort, Inc., through its subsidiaries, owns and operates the Atlantis Casino Resort Spa, a hotel/casino facility in Reno, Nevada. It also owns and operates the Monarch Casino Black Hawk in Black Hawk, Colorado. As of March 5, 2018, the company's Atlantis Casino Resort Spa featured approximately 61,000 square feet of casino space; 824 guest rooms; 8 food outlets; 2 espresso and pastry bars; a 30,000 square-foot health spa and salon with an enclosed pool; 2 retail outlets offering clothing and gift shop merchandise; an 8,000 square-foot family entertainment center; and approximately 52,000 square feet of banquet, convention, and meeting room space. Its Atlantis Casino Resort Spa also featured approximately 1,450 slot and video poker machines; approximately 38 table games, including blackjack, craps, roulette, and others; a race and sports book; a 24-hour live keno lounge; and a poker room. In addition, the company's Monarch Casino Black Hawk featured approximately 30,000 square feet of casino space, approximately 740 slot machines, 14 table games, a 250-seat buffet-style restaurant, a snack bar, and a nine-story parking structure with approximately 1,350 spaces, as well as valet parking with a total parking capacity to 1,500 spaces. Monarch Casino & Resort, Inc. was founded in 1972 and is based in Reno, Nevada.

Melco Resorts & Entertainment Company Profile

Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia. It owns and operates City of Dreams, an integrated casino resort that has 500 gaming tables and 800 gaming machines; approximately 1,400 hotel rooms and suites; a wet stage performance theater with approximately 2,000 seats; approximately 30 restaurants and bars, and 150 retail outlets; and recreation and leisure facilities, including health and fitness clubs, swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 112 gaming tables and 56 gaming machines; 230 hotel rooms; various fine dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically-themed integrated entertainment, retail, and gaming resort that comprises 280 gaming tables and 980 gaming machines in Cotai, Macau. Further, the company owns and operates 7 Mocha Clubs with 1,034 gaming machines, as well as Taipa Square casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, a casino, hotel, retail, and entertainment integrated resort in the Entertainment City complex in Manila. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. Melco Resorts & Entertainment Limited was incorporated in 2004 and is based in Central, Hong Kong. As of February 16, 2017, Melco Resorts & Entertainment Limited operates as a subsidiary of Melco Leisure and Entertainment Group Limited.

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