Caesars Acquisition (NASDAQ: CACQ) and MGM Resorts International (NYSE:MGM) are both mid-cap cyclical consumer goods & services companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
MGM Resorts International pays an annual dividend of $0.44 per share and has a dividend yield of 1.4%. Caesars Acquisition does not pay a dividend. MGM Resorts International pays out 26.0% of its earnings in the form of a dividend.
This is a breakdown of recent ratings and recommmendations for Caesars Acquisition and MGM Resorts International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MGM Resorts International||0||1||16||0||2.94|
MGM Resorts International has a consensus price target of $35.38, indicating a potential upside of 15.22%. Given MGM Resorts International’s higher possible upside, analysts plainly believe MGM Resorts International is more favorable than Caesars Acquisition.
Volatility and Risk
Caesars Acquisition has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, MGM Resorts International has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.
Earnings & Valuation
This table compares Caesars Acquisition and MGM Resorts International’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MGM Resorts International||$9.93 billion||1.78||$2.42 billion||$1.69||18.17|
MGM Resorts International has higher revenue and earnings than Caesars Acquisition. Caesars Acquisition 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.
This table compares Caesars Acquisition and MGM Resorts International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MGM Resorts International||9.26%||7.97%||2.85%|
Insider and Institutional Ownership
56.3% of Caesars Acquisition shares are held by institutional investors. Comparatively, 74.1% of MGM Resorts International shares are held by institutional investors. 0.2% of Caesars Acquisition shares are held by insiders. Comparatively, 12.2% of MGM Resorts International shares are held by 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.
MGM Resorts International beats Caesars Acquisition on 11 of the 13 factors compared between the two stocks.
About Caesars Acquisition
Caesars Acquisition Company (CAC) owns voting membership units of Caesars Growth Partners, LLC (CGP LLC), a joint venture between CAC and subsidiaries of Caesars Entertainment Corporation (CEC or Caesars Entertainment). CAC serves as CGP LLC’s managing member and sole holder of its outstanding voting units. CGP LLC is a casino asset and entertainment company. Through its relationship with Caesars Entertainment, CGP LLC has the ability to access Caesars Entertainment’s management know-how, brand equity, Total Rewards loyalty program and structural synergies. As of December 31, 2016, CGP LLC’s Interactive Entertainment business consisted of two operating units: The World Series of Poker (WSOP) and regulated online real money gaming (RMG). CGP LLC’s casino properties and developments include Planet Hollywood Resort & Casino in Las Vegas (Planet Hollywood), The LINQ Hotel & Casino, Bally’s Las Vegas, The Cromwell, Horseshoe Baltimore Casino (Horseshoe Baltimore) and Harrah’s New Orleans.
About MGM Resorts International
MGM Resorts International is a holding company. The Company, through its subsidiaries, owns and operates casino resorts. The Company operates in two segments: domestic resorts and MGM China. Its domestic resorts segment consists of non-gaming operations, including hotel, food and beverage, entertainment and other non-gaming amenities. Its casino operations feature a range of slots, table games, and race and sports book wagering. Its MGM China’s operations consist of the MGM Macau resort and casino, and the development of an integrated casino, hotel and entertainment resort on the Cotai Strip in Macau. Under its resort operation, the Company’s casino resorts offer gaming, hotel, convention, dining, entertainment, retail and other resort amenities. It owns Primm Valley Golf Club at the California/Nevada state line and Fallen Oak golf course in Saucier, Mississippi, among others. It owns and manages CityCenter Holdings, LLC, located between Bellagio and Monte Carlo.
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