Analyzing MGM Resorts International (NYSE:MGM) and Golden Entertainment (NASDAQ:GDEN)

Golden Entertainment (NASDAQ:GDEN) and MGM Resorts International (NYSE:MGM) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Golden Entertainment and MGM Resorts International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Golden Entertainment	2	4	3	0	2.11
MGM Resorts International	4	8	13	0	2.36

Golden Entertainment currently has a consensus price target of $32.60, suggesting a potential upside of 10.19%. MGM Resorts International has a consensus price target of $45.97, suggesting a potential upside of 47.30%. Given MGM Resorts International’s stronger consensus rating and higher probable upside, analysts plainly believe MGM Resorts International is more favorable than Golden Entertainment.

Profitability

This table compares Golden Entertainment and MGM Resorts International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Golden Entertainment	2.35%	3.23%	1.43%
MGM Resorts International	0.40%	16.95%	1.48%

Insider and Institutional Ownership

70.7% of Golden Entertainment shares are owned by institutional investors. Comparatively, 68.1% of MGM Resorts International shares are owned by institutional investors. 30.5% of Golden Entertainment shares are owned by insiders. Comparatively, 3.1% of MGM Resorts International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Golden Entertainment and MGM Resorts International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Golden Entertainment	$643.49 million	1.20	$50.73 million	$0.18	164.37
MGM Resorts International	$17.28 billion	0.49	$746.56 million	$0.16	195.06

MGM Resorts International has higher revenue and earnings than Golden Entertainment. Golden Entertainment 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.

Volatility & Risk

Golden Entertainment has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500. Comparatively, MGM Resorts International has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500.

Dividends

Golden Entertainment pays an annual dividend of $1.00 per share and has a dividend yield of 3.4%. MGM Resorts International pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. Golden Entertainment pays out 555.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGM Resorts International pays out 6.3% of its earnings in the form of a dividend.

Summary

MGM Resorts International beats Golden Entertainment on 9 of the 16 factors compared between the two stocks.

About Golden Entertainment

Golden Entertainment, Inc. owns and operates a diversified entertainment platform in the United States. The company operates through four segments; Nevada Casino Resorts, Nevada Locals Casinos, Nevada Taverns, and Distributed Gaming. It also operates casino, casino resorts, and taverns; and slot machines in third party non-casino locations. The company was incorporated in 1998 and is headquartered in Las Vegas, Nevada.

About MGM Resorts International

MGM Resorts International, through its subsidiaries, owns and operates casino, hotel, and entertainment resorts in the United States and internationally. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company's casino operations include slots and table games, as well as online sports betting and iGaming through BetMGM. Its customers include premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was incorporated in 1986 and is based in Las Vegas, Nevada.