Ameristar Casinos (ASCA) versus MGM Resorts International (MGM) Critical Analysis
MGM Resorts International (NYSE: MGM) and Ameristar Casinos (NASDAQ:ASCA) are both cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.
Volatility and Risk
MGM Resorts International has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, Ameristar Casinos has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for MGM Resorts International and Ameristar Casinos, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MGM Resorts International||0||4||12||0||2.75|
MGM Resorts International presently has a consensus price target of $36.54, indicating a potential upside of 11.30%.
Earnings and Valuation
This table compares MGM Resorts International and Ameristar Casinos’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MGM Resorts International||$9.46 billion||1.97||$1.10 billion||$1.02||32.19|
MGM Resorts International has higher revenue and earnings than Ameristar Casinos. Ameristar Casinos 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.
This table compares MGM Resorts International and Ameristar Casinos’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MGM Resorts International||5.44%||6.47%||2.31%|
MGM Resorts International pays an annual dividend of $0.44 per share and has a dividend yield of 1.3%. Ameristar Casinos does not pay a dividend. MGM Resorts International pays out 43.1% of its earnings in the form of a dividend.
Insider and Institutional Ownership
83.0% of MGM Resorts International shares are held by institutional investors. 12.2% of MGM Resorts International shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
MGM Resorts International beats Ameristar Casinos on 9 of the 11 factors compared between the two stocks.
About MGM Resorts International
MGM Resorts International is a holding company. The Company, through its subsidiaries, owns and operates casino resorts. The Company operates in two segments: domestic resorts and MGM China. Its domestic resorts segment consists of non-gaming operations, including hotel, food and beverage, entertainment and other non-gaming amenities. Its casino operations feature a range of slots, table games, and race and sports book wagering. Its MGM China’s operations consist of the MGM Macau resort and casino, and the development of an integrated casino, hotel and entertainment resort on the Cotai Strip in Macau. Under its resort operation, the Company’s casino resorts offer gaming, hotel, convention, dining, entertainment, retail and other resort amenities. It owns Primm Valley Golf Club at the California/Nevada state line and Fallen Oak golf course in Saucier, Mississippi, among others. It owns and manages CityCenter Holdings, LLC, located between Bellagio and Monte Carlo.
About Ameristar Casinos
Ameristar Casinos, Inc.(Ameristar), is a developer, owner and operator of casino entertainment facilities in local and regional markets. The Company has eight properties in seven markets. Its portfolio of casinos consists of: Ameristar Casino Resort Spa St. Charles (serving the St. Louis, Missouri metropolitan area); Ameristar Casino Hotel Kansas City (serving the Kansas City metropolitan area); Ameristar Casino Hotel Council Bluffs (serving Omaha, Nebraska and southwestern Iowa); Ameristar Casino Resort Spa Black Hawk (serving the Denver metropolitan area); Ameristar Casino Hotel Vicksburg (serving Jackson, Mississippi and Monroe, Louisiana); Ameristar Casino Hotel East Chicago (serving the Chicagoland area); and Cactus Petes Resort Casino and The Horseshu Hotel and Casino in Jackpot, Nevada (serving Idaho and the Pacific Northwest). In August 2013, Pinnacle Entertainment Inc completed the acquisition of Ameristar Casinos, Inc.
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