MGM Resorts International (NYSE:MGM) and Monarch Casino & Resort (NASDAQ:MCRI) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.
Profitability
This table compares MGM Resorts International and Monarch Casino & Resort's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| MGM Resorts International | 20.81% | -12.08% | -4.10% |
| Monarch Casino & Resort | 7.77% | 5.54% | 3.18% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for MGM Resorts International and Monarch Casino & Resort, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| MGM Resorts International | 3 | 11 | 5 | 0 | 2.11 |
| Monarch Casino & Resort | 0 | 0 | 4 | 0 | 3.00 |
MGM Resorts International presently has a consensus price target of $29.5625, suggesting a potential downside of 26.57%. Monarch Casino & Resort has a consensus price target of $50.60, suggesting a potential downside of 24.99%. Given Monarch Casino & Resort's stronger consensus rating and higher probable upside, analysts plainly believe Monarch Casino & Resort is more favorable than MGM Resorts International.
Earnings and Valuation
This table compares MGM Resorts International and Monarch Casino & Resort's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| MGM Resorts International | $12.90 billion | 1.54 | $2.05 billion | $0.77 | 52.29 |
| Monarch Casino & Resort | $249.17 million | 4.99 | $31.82 million | $1.94 | 34.77 |
MGM Resorts International has higher revenue and earnings than Monarch Casino & Resort. Monarch Casino & Resort is trading at a lower price-to-earnings ratio than MGM Resorts International, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
63.4% of MGM Resorts International shares are held by institutional investors. Comparatively, 62.4% of Monarch Casino & Resort shares are held by institutional investors. 5.1% of MGM Resorts International shares are held by company insiders. Comparatively, 26.8% of Monarch Casino & Resort shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Volatility & Risk
MGM Resorts International has a beta of 2.42, indicating that its share price is 142% more volatile than the S&P 500. Comparatively, Monarch Casino & Resort has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500.
Summary
Monarch Casino & Resort beats MGM Resorts International on 8 of the 14 factors compared between the two stocks.
