Golden Entertainment (NASDAQ:GDEN – Get Free Report) and Monarch Casino & Resort (NASDAQ:MCRI – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.
Profitability
This table compares Golden Entertainment and Monarch Casino & Resort’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Golden Entertainment | 0.85% | 1.20% | 0.52% |
| Monarch Casino & Resort | 19.26% | 19.33% | 14.67% |
Insider & Institutional Ownership
70.7% of Golden Entertainment shares are owned by institutional investors. Comparatively, 62.4% of Monarch Casino & Resort shares are owned by institutional investors. 30.5% of Golden Entertainment shares are owned by company insiders. Comparatively, 25.5% of Monarch Casino & Resort shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Volatility & Risk
Analyst Recommendations
This is a summary of current ratings for Golden Entertainment and Monarch Casino & Resort, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Golden Entertainment | 1 | 5 | 3 | 0 | 2.22 |
| Monarch Casino & Resort | 0 | 5 | 2 | 0 | 2.29 |
Golden Entertainment currently has a consensus target price of $32.60, suggesting a potential upside of 21.51%. Monarch Casino & Resort has a consensus target price of $99.40, suggesting a potential upside of 1.69%. Given Golden Entertainment’s higher possible upside, equities analysts clearly believe Golden Entertainment is more favorable than Monarch Casino & Resort.
Valuation and Earnings
This table compares Golden Entertainment and Monarch Casino & Resort”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Golden Entertainment | $666.82 million | 1.05 | $50.73 million | $0.18 | 149.06 |
| Monarch Casino & Resort | $522.19 million | 3.42 | $72.77 million | $5.54 | 17.64 |
Monarch Casino & Resort has lower revenue, but higher earnings than Golden Entertainment. Monarch Casino & Resort is trading at a lower price-to-earnings ratio than Golden Entertainment, indicating that it is currently the more affordable of the two stocks.
Dividends
Golden Entertainment pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. Monarch Casino & Resort pays an annual dividend of $1.20 per share and has a dividend yield of 1.2%. 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. Monarch Casino & Resort pays out 21.7% of its earnings in the form of a dividend.
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 Monarch Casino & Resort
Monarch Casino & Resort, Inc. engages in the ownership and operation of the Atlantis Casino Resort Spa, a hotel and casino facility in Reno, Nevada, and the Monarch Black Hawk Casino in Black Hawk, Colorado. The company was founded in 1993 and is headquartered in Reno, NV.
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