RCI Hospitality (NASDAQ:RICK – Get Free Report) and Caesars Entertainment (NASDAQ:CZR – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.
Profitability
This table compares RCI Hospitality and Caesars Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RCI Hospitality | 3.87% | 4.05% | 1.82% |
| Caesars Entertainment | -4.37% | -7.97% | -1.00% |
Valuation & Earnings
This table compares RCI Hospitality and Caesars Entertainment”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RCI Hospitality | $279.43 million | 0.71 | $10.81 million | $1.20 | 21.33 |
| Caesars Entertainment | $11.49 billion | 0.49 | -$502.00 million | ($2.43) | -11.49 |
RCI Hospitality has higher earnings, but lower revenue than Caesars Entertainment. Caesars Entertainment is trading at a lower price-to-earnings ratio than RCI Hospitality, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations and price targets for RCI Hospitality and Caesars Entertainment, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RCI Hospitality | 1 | 0 | 0 | 0 | 1.00 |
| Caesars Entertainment | 1 | 7 | 9 | 0 | 2.47 |
Caesars Entertainment has a consensus price target of $32.73, indicating a potential upside of 17.28%. Given Caesars Entertainment’s stronger consensus rating and higher probable upside, analysts clearly believe Caesars Entertainment is more favorable than RCI Hospitality.
Volatility & Risk
RCI Hospitality has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Caesars Entertainment has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.
Insider and Institutional Ownership
53.8% of RCI Hospitality shares are owned by institutional investors. Comparatively, 91.8% of Caesars Entertainment shares are owned by institutional investors. 9.6% of RCI Hospitality shares are owned by company insiders. Comparatively, 1.0% of Caesars Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Summary
RCI Hospitality beats Caesars Entertainment on 8 of the 14 factors compared between the two stocks.
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.
About Caesars Entertainment
Caesars Entertainment, Inc. operates as a gaming and hospitality company. The company owns, leases, or manages domestic properties in 18 states with slot machines, video lottery terminals and e-tables, and hotel rooms, as well as table games, including poker. It also operates and conducts retail and online sports wagering across 31 jurisdictions in North America and operates iGaming in five jurisdictions in North America; sports betting from our retail and online sportsbooks; and other games, such as keno. In addition, the company operates dining venues, bars, nightclubs, lounges, hotels, and entertainment venues; and provides staffing and management services. Caesars Entertainment, Inc. was founded in 1937 and is based in Reno, Nevada.
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