Melco Resorts & Entertainment (NASDAQ:MLCO) versus SJM (OTCMKTS:SJMHF) Critical Contrast

Melco Resorts & Entertainment (NASDAQ:MLCO) and SJM (OTCMKTS:SJMHF) are both mid-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Melco Resorts & Entertainment	2.06%	-23.00%	2.83%
SJM	N/A	N/A	N/A

Institutional & Insider Ownership

39.6% of Melco Resorts & Entertainment shares are held by institutional investors. 57.1% of Melco Resorts & Entertainment shares are held 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 breakdown of recent recommendations for Melco Resorts & Entertainment and SJM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Melco Resorts & Entertainment	2	2	5	0	2.33
SJM	0	2	0	0	2.00

Melco Resorts & Entertainment presently has a consensus target price of $8.40, suggesting a potential upside of 6.60%. Given Melco Resorts & Entertainment’s stronger consensus rating and higher possible upside, equities analysts plainly believe Melco Resorts & Entertainment is more favorable than SJM.

Earnings and Valuation

This table compares Melco Resorts & Entertainment and SJM”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Melco Resorts & Entertainment	$4.64 billion	0.71	$43.54 million	$0.26	30.31
SJM	$3.69 billion	0.59	$410,000.00	N/A	N/A

Melco Resorts & Entertainment has higher revenue and earnings than SJM.

Risk and Volatility

Melco Resorts & Entertainment has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, SJM has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.

Summary

Melco Resorts & Entertainment beats SJM on 10 of the 12 factors compared between the two stocks.

About Melco Resorts & Entertainment

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.

About SJM

SJM Holdings Limited, an investment holding company, owns, develops, and operates casinos and related facilities in Macau. The company operates through two segments, Gaming Operations; and Hotel, Catering, Retail and Leasing Operations. The Gaming Operations segment engages in rolling, non-rolling, and electronic game gaming operations. The Hotel, Catering, Retail, and Leasing Operations segment operates and manages a hotel; and offers catering, leasing, retail, and related activities. It also provides marketing and promotion, property development preparation, casino operations management, dredging, customer, retail, human resources and project management, shopping mall management, food and beverage, treasury, management, and hospitality services. The company was incorporated in 2006 and is based in Central, Hong Kong. SJM Holdings Limited is a subsidiary of Sociedade de Turismo e Diversões de Macau, S.A.