Analyzing Studio City International (MSC) and Eldorado Resorts (ERI)

Studio City International (NYSE:MSC) and Eldorado Resorts (NASDAQ:ERI) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Profitability

This table compares Studio City International and Eldorado Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Studio City International N/A N/A N/A
Eldorado Resorts 5.00% 11.41% 2.34%

Insider and Institutional Ownership

18.7% of Studio City International shares are owned by institutional investors. Comparatively, 88.1% of Eldorado Resorts shares are owned by institutional investors. 1.5% of Eldorado Resorts shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Studio City International and Eldorado Resorts’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Studio City International $571.21 million 2.95 -$20.75 million ($0.24) -76.08
Eldorado Resorts $2.06 billion 1.75 $95.24 million $1.38 33.65

Eldorado Resorts has higher revenue and earnings than Studio City International. Studio City International is trading at a lower price-to-earnings ratio than Eldorado Resorts, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Studio City International and Eldorado Resorts, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Studio City International 2 0 0 0 1.00
Eldorado Resorts 0 1 5 0 2.83

Studio City International currently has a consensus target price of $20.00, suggesting a potential upside of 9.53%. Eldorado Resorts has a consensus target price of $55.67, suggesting a potential upside of 19.87%. Given Eldorado Resorts’ stronger consensus rating and higher probable upside, analysts plainly believe Eldorado Resorts is more favorable than Studio City International.

Summary

Eldorado Resorts beats Studio City International on 11 of the 12 factors compared between the two stocks.

About Studio City International

Studio City International Holdings Limited operates a gaming, retail, and entertainment resort in Cotai, Macau. The company also operates Studio City Casino with 250 mass market gaming tables; approximately 970 gaming machines; and 45 VIP rolling chip tables. In addition, its resort provides various non-gaming facilities, including approximately 1,600 hotel rooms; various food and beverage establishments; retail space; figure-8 Ferris wheel; a Warner Bros.-themed family entertainment center; a 4-D Batman flight simulator; a night club; and a 5,000-seat live performance arena. The company was formerly known as Cyber One Agents Limited and changed its name to Studio City International Holdings Limited in January 2012. The company was founded in 2000 and is based in Central, Hong Kong. Studio City International Holdings Limited is a subsidiary of Melco Resorts & Entertainment Limited.

About Eldorado Resorts

Eldorado Resorts, Inc. operates as a gaming and hospitality company in the United States. It owns and operates Eldorado Resort Casino Reno, a hotel, casino, and entertainment facility; Silver Legacy Resort Casino, a themed hotel and casino; Circus Circus Reno, a hotel-casino and entertainment complex; Eldorado Resort Casino Shreveport, a hotel and tri-level riverboat dockside casino; Mountaineer Casino, Racetrack & Resort, a hotel, casino, entertainment, and live thoroughbred horse racing facility; Presque Isle Downs & Casino, a casino and live thoroughbred horse racing facility; and Eldorado Gaming Scioto Downs, a modern racino. The company also operates Isle Casino Hotel—Black Hawk and Lady Luck Casino—Black Hawk land-based casinos; Isle Casino Racing Pompano Park, a casino and harness racing track; Isle Casino Bettendorf, a land-based single-level casino; Isle Casino Waterloo, a single-level land-based casino; Isle of Capri Casino Hotel Lake Charles, a gaming vessel; Isle of Capri Casino Lula, a two dockside casino; Lady Luck Casino Vicksburg and Isle of Capri Casino Kansas City dockside casinos; Isle of Capri Casino Boonville, a single-level dockside casino; Isle Casino Cape Girardeau, a dockside casino, and pavilion and entertainment center; Lady Luck Casino Caruthersville, a riverboat casino; and Lady Luck Casino Nemacolin, a casino property. In addition, it operates Tropicana Casino and Resort, Atlantic City, a casino and resort; Tropicana Evansville, a casino hotel and entertainment complex; Lumière Place Casino, Tropicana Laughlin Hotel and Casino, MontBleu Casino Resort & Spa, and Grand Victoria Casino; Trop Casino Greenville, a landside gaming facility; Belle of Baton Rouge Casino & Hotel, a dockside riverboat; and Racelinebet.com. As of December 31, 2018, it owned 28 gaming facilities with approximately 30,000 slot machines and video lottery terminals; 800 table games; and 12,600 hotel rooms. The company was founded in 1973 and is based in Reno, Nevada.

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