Gaming and Leisure Properties (NASDAQ: GLPI) and MGM Growth Properties (NYSE:MGP) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.
Risk and Volatility
Gaming and Leisure Properties has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, MGM Growth Properties has a beta of -1.43, indicating that its stock price is 243% less volatile than the S&P 500.
This table compares Gaming and Leisure Properties and MGM Growth Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Gaming and Leisure Properties||39.31%||17.37%||5.83%|
|MGM Growth Properties||6.18%||0.81%||0.48%|
This is a breakdown of recent ratings and price targets for Gaming and Leisure Properties and MGM Growth Properties, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Gaming and Leisure Properties||0||2||4||0||2.67|
|MGM Growth Properties||0||2||4||0||2.67|
Gaming and Leisure Properties presently has a consensus target price of $40.20, suggesting a potential upside of 10.44%. MGM Growth Properties has a consensus target price of $32.33, suggesting a potential upside of 15.48%. Given MGM Growth Properties’ higher probable upside, analysts plainly believe MGM Growth Properties is more favorable than Gaming and Leisure Properties.
Institutional & Insider Ownership
92.0% of Gaming and Leisure Properties shares are held by institutional investors. 5.9% of Gaming and Leisure Properties shares are held by company insiders. Comparatively, 0.6% of MGM Growth Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Gaming and Leisure Properties and MGM Growth Properties’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Gaming and Leisure Properties||$828.26 million||9.34||$289.30 million||$1.80||20.22|
|MGM Growth Properties||$467.55 million||4.25||$29.93 million||$0.77||36.36|
Gaming and Leisure Properties has higher revenue and earnings than MGM Growth Properties. Gaming and Leisure Properties is trading at a lower price-to-earnings ratio than MGM Growth Properties, indicating that it is currently the more affordable of the two stocks.
Gaming and Leisure Properties pays an annual dividend of $2.52 per share and has a dividend yield of 6.9%. MGM Growth Properties pays an annual dividend of $1.68 per share and has a dividend yield of 6.0%. Gaming and Leisure Properties pays out 140.0% 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 Growth Properties pays out 218.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gaming and Leisure Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Gaming and Leisure Properties beats MGM Growth Properties on 12 of the 14 factors compared between the two stocks.
Gaming and Leisure Properties Company Profile
Gaming and Leisure Properties, Inc. (GLPI) is a self-administered and self-managed Pennsylvania real estate investment trust (REIT). The Company is engaged in the business of acquiring, financing and owning real estate property to be leased to gaming operators in triple net lease arrangements. Its segments include GLP Capital, L.P. (GLP Capital), through which the Company owns all of its real estate assets, and the TRS Properties, which consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge. The GLP Capital segment consists of the leased real property. As of December 31, 2016, the Company had 34 rental properties, consisting of the real property associated with 18 gaming and related facilities operated by Penn National Gaming, Inc. (Penn), the real property associated with 15 gaming and related facilities operated by Pinnacle Entertainment, Inc. (Pinnacle), and the real property associated with the Casino Queen in East St. Louis, Illinois.
MGM Growth Properties Company Profile
MGM Growth Properties LLC is a real estate investment trust engaged in the acquisition, ownership and leasing of destination entertainment and leisure resorts, whose amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. Its portfolio consists of approximately 10 destination resorts. It has over six entertainment and gaming-related properties located on the Las Vegas Strip, including Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor and Excalibur, and The Park, a dining and entertainment complex located between New York-New York and Monte Carlo. Outside of Las Vegas, it owns over four casino resort properties, including MGM Grand Detroit in Detroit, Michigan, Borgata Hotel Casino & Spa in Atlantic City, New Jersey, and Beau Rivage and Gold Strike Tunica, both of which are located in Mississippi. It operates approximately 27,330 hotel rooms, over 200 restaurants, approximately 100 retail outlets and over 20 entertainment venues.
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