Churchill Downs (NASDAQ:CHDN) versus Brightstar Lottery (NYSE:BRSL) Head to Head Analysis

Brightstar Lottery (NYSE:BRSL) and Churchill Downs (NASDAQ:CHDN) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for Brightstar Lottery and Churchill Downs, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brightstar Lottery	1	4	4	0	2.33
Churchill Downs	0	1	10	0	2.91

Brightstar Lottery currently has a consensus price target of $15.10, suggesting a potential upside of 33.27%. Churchill Downs has a consensus price target of $134.89, suggesting a potential upside of 54.92%. Given Churchill Downs’ stronger consensus rating and higher probable upside, analysts plainly believe Churchill Downs is more favorable than Brightstar Lottery.

Insider and Institutional Ownership

44.3% of Brightstar Lottery shares are held by institutional investors. Comparatively, 82.6% of Churchill Downs shares are held by institutional investors. 1.2% of Brightstar Lottery shares are held by insiders. Comparatively, 5.9% of Churchill Downs shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Brightstar Lottery pays an annual dividend of $0.92 per share and has a dividend yield of 8.1%. Churchill Downs pays an annual dividend of $0.44 per share and has a dividend yield of 0.5%. Brightstar Lottery pays out 70.8% of its earnings in the form of a dividend. Churchill Downs pays out 7.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Churchill Downs has raised its dividend for 14 consecutive years.

Volatility and Risk

Brightstar Lottery has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Churchill Downs has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Profitability

This table compares Brightstar Lottery and Churchill Downs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brightstar Lottery	10.05%	10.47%	2.06%
Churchill Downs	13.82%	42.16%	6.31%

Valuation and Earnings

This table compares Brightstar Lottery and Churchill Downs”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brightstar Lottery	$2.47 billion	0.86	$147.00 million	$1.30	8.72
Churchill Downs	$2.93 billion	2.07	$383.00 million	$5.83	14.93

Churchill Downs has higher revenue and earnings than Brightstar Lottery. Brightstar Lottery is trading at a lower price-to-earnings ratio than Churchill Downs, indicating that it is currently the more affordable of the two stocks.

Summary

Churchill Downs beats Brightstar Lottery on 15 of the 17 factors compared between the two stocks.

About Brightstar Lottery

International Game Technology PLC operates and provides gaming technology products and services in North America, Europe, the Middle East, Africa, Asia-Pacific, Latin America, and the Caribbean. It operates in three segments: Global Lottery, Global Gaming, and Digital & Betting. The company designs, sells, operates, and leases a suite of point-of-sale machines that reconciles lottery funds between the retailer and lottery authority; provides online lottery transaction processing systems; produces instant ticket games; and offers printing services, such as instant ticket marketing plans and graphic design, programming, packaging, shipping, and delivery services. It also designs, develops, assembles, and provides cabinets, games, systems, and software for the gaming market, as well as offers gaming management systems for casino management, customer relationship management, patron management, and server-based gaming. In addition, the company provides video lottery terminals (VLT), VLT central systems, and VLT games. Further, it offers digital gaming and betting; sports betting; and technology and management services. Additionally, the company provides digital gaming products and services, including blackjack, roulette, slot games, poker, bingo, and other casino card games; social casino content; and remote game server, as well as iGaming systems and digital platforms that offer player account management, advanced marketing and analytical, and payment system services. It processes commercial transactions, such as prepaid cellular telephone recharges, bill payments, e-vouchers and retail-based programs, electronic tax payments, prepaid card recharges, and stamp duty and money transfer services. The company was formerly known as GTECH S.p.A. and changed its name to International Game Technology PLC in April 2015. The company was founded in 2014 and is headquartered in London, the United Kingdom. International Game Technology PLC is a subsidiary of De Agostini S.p.A.

About Churchill Downs

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. The company operates pari-mutuel gaming entertainment venues; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; retail sports books; casino gaming; and Terre Haute Casino Resort. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.