Monarch Casino & Resort (NASDAQ:MCRI – Get Free Report) and RCI Hospitality (NASDAQ:RICK – Get Free Report) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.
Risk and Volatility
Monarch Casino & Resort has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, RCI Hospitality has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.
Dividends
Monarch Casino & Resort pays an annual dividend of $1.20 per share and has a dividend yield of 1.0%. RCI Hospitality pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Monarch Casino & Resort pays out 19.2% of its earnings in the form of a dividend. RCI Hospitality pays out -78.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. RCI Hospitality has increased its dividend for 4 consecutive years. RCI Hospitality is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Monarch Casino & Resort | 20.40% | 20.63% | 15.79% |
| RCI Hospitality | -1.48% | -1.74% | -0.72% |
Insider & Institutional Ownership
62.4% of Monarch Casino & Resort shares are owned by institutional investors. Comparatively, 53.8% of RCI Hospitality shares are owned by institutional investors. 26.3% of Monarch Casino & Resort shares are owned by insiders. Comparatively, 11.4% of RCI Hospitality shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of current ratings and recommmendations for Monarch Casino & Resort and RCI Hospitality, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Monarch Casino & Resort | 0 | 4 | 2 | 1 | 2.57 |
| RCI Hospitality | 1 | 0 | 0 | 0 | 1.00 |
Monarch Casino & Resort currently has a consensus price target of $124.40, indicating a potential upside of 6.09%. Given Monarch Casino & Resort’s stronger consensus rating and higher possible upside, research analysts plainly believe Monarch Casino & Resort is more favorable than RCI Hospitality.
Earnings and Valuation
This table compares Monarch Casino & Resort and RCI Hospitality”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Monarch Casino & Resort | $545.12 million | 3.85 | $101.39 million | $6.24 | 18.79 |
| RCI Hospitality | $279.43 million | 0.75 | $10.81 million | ($0.41) | -67.24 |
Monarch Casino & Resort has higher revenue and earnings than RCI Hospitality. RCI Hospitality is trading at a lower price-to-earnings ratio than Monarch Casino & Resort, indicating that it is currently the more affordable of the two stocks.
Summary
Monarch Casino & Resort beats RCI Hospitality on 15 of the 18 factors compared between the two stocks.
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.
About RCI Hospitality
RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company’s wholly-owned subsidiaries own and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. Wholly-owned subsidiaries also operate restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company founded in 1983 as Rick's Cabaret International, Inc., changed its name to RCI Hospitality Holdings, Inc. in August 2014, and is based in Houston, Texas.
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