MGM Resorts International (NYSE:MGM) & Studio City International (NYSE:MSC) Financial Analysis

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

Institutional and Insider Ownership

81.7% of MGM Resorts International shares are held by institutional investors. Comparatively, 22.2% of Studio City International shares are held by institutional investors. 3.5% of MGM Resorts International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for MGM Resorts International and Studio City International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGM Resorts International 1 6 4 0 2.27
Studio City International 1 0 0 0 1.00

MGM Resorts International currently has a consensus target price of $31.90, indicating a potential downside of 4.18%. Given MGM Resorts International’s stronger consensus rating and higher possible upside, analysts clearly believe MGM Resorts International is more favorable than Studio City International.

Profitability

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

Net Margins Return on Equity Return on Assets
MGM Resorts International 0.11% 4.10% 1.43%
Studio City International 2.12% 2.77% 1.03%

Valuation & Earnings

This table compares MGM Resorts International and Studio City International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MGM Resorts International $11.76 billion 1.48 $445.45 million $0.99 33.63
Studio City International $571.21 million 2.77 -$20.75 million ($0.24) -83.92

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

Risk & Volatility

MGM Resorts International has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Studio City International has a beta of -1.06, meaning that its share price is 206% less volatile than the S&P 500.

Summary

MGM Resorts International beats Studio City International on 12 of the 14 factors compared between the two stocks.

About MGM Resorts International

MGM Resorts International, through its subsidiaries, owns and operates integrated casino, hotel, and entertainment resorts in the United States and Macau. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company's casino operations include slots, table games, and race and sports book wagering. As of February 27, 2019, its portfolio consisted of 29 hotel and destination gaming offerings. The company also owns and operates Shadow Creek golf course, Primm Valley Golf Club, and Fallen Oak golf course. Its customers include premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.

About Studio City International

Studio City International Holdings Ltd. is a gaming, retail and entertainment resort located in Cotai, Macau. It engages in the hospitality business and provision of gaming related services in Macau. The company was founded on August 2, 2000 and is headquartered in Hong Kong.

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