Churchill Downs (NASDAQ:CHDN – Get Free Report) and Universal Entertainment (OTCMKTS:UETMF – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Churchill Downs and Universal Entertainment, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Churchill Downs | 0 | 1 | 9 | 1 | 3.00 |
| Universal Entertainment | 0 | 0 | 0 | 0 | 0.00 |
Churchill Downs currently has a consensus price target of $133.30, suggesting a potential upside of 16.93%. Given Churchill Downs’ stronger consensus rating and higher possible upside, research analysts plainly believe Churchill Downs is more favorable than Universal Entertainment.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Churchill Downs | $2.73 billion | 2.91 | $426.80 million | $5.50 | 20.73 |
| Universal Entertainment | $835.53 million | 0.61 | -$102.75 million | ($2.25) | -2.91 |
Churchill Downs has higher revenue and earnings than Universal Entertainment. Universal Entertainment is trading at a lower price-to-earnings ratio than Churchill Downs, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Churchill Downs has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Universal Entertainment has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.
Insider & Institutional Ownership
82.6% of Churchill Downs shares are owned by institutional investors. 5.3% of Churchill Downs shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Churchill Downs and Universal Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Churchill Downs | 13.99% | 42.54% | 6.11% |
| Universal Entertainment | -20.60% | 9.72% | 5.72% |
Summary
Churchill Downs beats Universal Entertainment on 15 of the 15 factors compared between the two stocks.
About Churchill Downs
Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. The company operates pari-mutuel gaming entertainment venues; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; retail sports books; casino gaming; and Terre Haute Casino Resort. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.
About Universal Entertainment
Universal Entertainment Corporation, together with its subsidiaries, manufactures, develops, and sells pachislot and pachinko machines in Japan, Philippines, and internationally. The company operates in two segments, Amusement Equipment Business, and Integrated Resort Business. The company also develops and provides Falcon X, a peripheral system; Hot Stadium, a digital signage system; Universal Kingdom, a membership website for Android; and Slots Street, a social casino game; as well as operates OKADA MANILA, a casino resort in the Philippines. In addition, it operates casino, hotel, food and beverage, retail and leasing, entertainment, and real estate development businesses. The company was formerly known as Aruze Corp. and changed its name to Universal Entertainment Corporation in November 2009. Universal Entertainment Corporation was founded in 1969 and is headquartered in Tokyo, Japan.
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