Contrasting Melco Crown Entertainment Limited (MLCO) & Golden Entertainment (GDEN)

Golden Entertainment (NASDAQ: GDEN) and Melco Crown Entertainment Limited (NASDAQ:MLCO) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, earnings, risk and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations and price targets for Golden Entertainment and Melco Crown Entertainment Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Golden Entertainment 0 1 0 0 2.00
Melco Crown Entertainment Limited 0 5 9 0 2.64

Melco Crown Entertainment Limited has a consensus target price of $21.42, suggesting a potential downside of 5.23%. Given Melco Crown Entertainment Limited’s stronger consensus rating and higher probable upside, analysts plainly believe Melco Crown Entertainment Limited is more favorable than Golden Entertainment.

Earnings & Valuation

This table compares Golden Entertainment and Melco Crown Entertainment Limited’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Golden Entertainment $426.75 million 1.23 $44.77 million $0.80 29.30
Melco Crown Entertainment Limited $4.92 billion 2.26 $1.11 billion $0.52 43.46

Melco Crown Entertainment Limited has higher revenue and earnings than Golden Entertainment. Golden Entertainment is trading at a lower price-to-earnings ratio than Melco Crown Entertainment Limited, indicating that it is currently the more affordable of the two stocks.

Dividends

Melco Crown Entertainment Limited pays an annual dividend of $0.30 per share and has a dividend yield of 1.3%. Golden Entertainment does not pay a dividend. Melco Crown Entertainment Limited pays out 57.7% of its earnings in the form of a dividend.

Risk and Volatility

Golden Entertainment has a beta of 0.05, meaning that its stock price is 95% less volatile than the S&P 500. Comparatively, Melco Crown Entertainment Limited has a beta of 1.86, meaning that its stock price is 86% more volatile than the S&P 500.

Profitability

This table compares Golden Entertainment and Melco Crown Entertainment Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Golden Entertainment 4.29% 6.26% 3.17%
Melco Crown Entertainment Limited 5.11% 9.20% 3.59%

Institutional & Insider Ownership

27.5% of Golden Entertainment shares are held by institutional investors. Comparatively, 39.8% of Melco Crown Entertainment Limited shares are held by institutional investors. 52.0% of Golden Entertainment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Melco Crown Entertainment Limited beats Golden Entertainment on 12 of the 16 factors compared between the two stocks.

About Golden Entertainment

Golden Entertainment, Inc. is a group of gaming companies. The Company focuses on distributed gaming, including tavern gaming, and casino and resort operations. It operates through two segments: Distributed Gaming and Casinos. Its Distributed Gaming segment involves the installation, maintenance and operation of gaming and amusement devices in certain strategic, high-traffic, non-casino locations (such as grocery stores, convenience stores, restaurants, bars, taverns, saloons and liquor stores) in Nevada and Montana, and the operation of traditional, branded taverns targeting local patrons, primarily in the greater Las Vegas, Nevada metropolitan area. As of December 31, 2016, its distributed gaming operations consisted of approximately 10,400 gaming devices in approximately 960 locations. Its Casinos segment consists of the Rocky Gap Casino Resort in Flintstone, Maryland and three casinos in Pahrump, Nevada: Pahrump Nugget Hotel Casino, Gold Town Casino and Lakeside Casino & RV Park.

About Melco Crown Entertainment Limited

Melco Resorts & Entertainment Limited, formerly Melco Crown Entertainment Limited, is a holding company. The Company, through its subsidiaries, develops, owns and operates casino gaming and entertainment casino resort facilities in Asia. It is principally engaged in the gaming and hospitality business in Asia and its principal operating and developmental activities occur in over two geographic areas, which include Macau and the Philippines. Its segments include City of Dreams, Altira Macau, Studio City, Mocha Clubs, City of Dreams Manila, and Corporate and Others. It has over three casino based operations in Macau, namely, City of Dreams, Altira Macau and Studio City, and non-casino based operations in Macau at its Mocha Clubs. It also has a casino based operation in the Philippines, City of Dreams Manila. It is developing the fifth hotel tower at City of Dreams in Cotai, Macau. Its other operations also include Taipa Square Casino, Macau operating within Hotel Taipa Square.

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