Nintendo (OTCMKTS:NTDOY – Get Free Report) and Melco Resorts & Entertainment (NASDAQ:MLCO – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Nintendo and Melco Resorts & Entertainment, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nintendo | 1 | 4 | 2 | 1 | 2.38 |
| Melco Resorts & Entertainment | 2 | 2 | 5 | 1 | 2.50 |
Melco Resorts & Entertainment has a consensus price target of $7.77, suggesting a potential upside of 42.38%. Given Melco Resorts & Entertainment’s stronger consensus rating and higher possible upside, analysts plainly believe Melco Resorts & Entertainment is more favorable than Nintendo.
Volatility and Risk
Insider & Institutional Ownership
0.0% of Nintendo shares are held by institutional investors. Comparatively, 39.6% of Melco Resorts & Entertainment shares are held by institutional investors. 57.1% of Melco Resorts & Entertainment shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Nintendo and Melco Resorts & Entertainment”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nintendo | $15.37 billion | 3.75 | $2.80 billion | $0.60 | 18.64 |
| Melco Resorts & Entertainment | $5.16 billion | 0.41 | $185.04 million | $0.58 | 9.41 |
Nintendo has higher revenue and earnings than Melco Resorts & Entertainment. Melco Resorts & Entertainment is trading at a lower price-to-earnings ratio than Nintendo, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Nintendo and Melco Resorts & Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nintendo | 18.33% | 13.74% | 10.65% |
| Melco Resorts & Entertainment | 4.33% | -32.60% | 4.03% |
Summary
Nintendo beats Melco Resorts & Entertainment on 8 of the 14 factors compared between the two stocks.
About Nintendo
Nintendo Co., Ltd., together with its subsidiaries, develops, manufactures, and sells home entertainment products in Japan, the Americas, Europe, and internationally. It also offers video game platforms, playing cards, Karuta, and other products; and handheld and home console hardware systems and related software. The company was formerly known as Nintendo Playing Card Co., Ltd. and changed its name to Nintendo Co., Ltd. in 1963. Nintendo Co., Ltd. was founded in 1889 and is headquartered in Kyoto, Japan.
About Melco Resorts & Entertainment
Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia. It owns and operates City of Dreams, an integrated casino resort that has 500 gaming tables and 800 gaming machines; approximately 1,400 hotel rooms and suites; a wet stage performance theater with approximately 2,000 seats; approximately 30 restaurants and bars, and 150 retail outlets; and recreation and leisure facilities, including health and fitness clubs, swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 112 gaming tables and 56 gaming machines; 230 hotel rooms; various fine dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically-themed integrated entertainment, retail, and gaming resort that comprises 280 gaming tables and 980 gaming machines in Cotai, Macau. Further, the company owns and operates 7 Mocha Clubs with 1,034 gaming machines, as well as Taipa Square casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, a casino, hotel, retail, and entertainment integrated resort in the Entertainment City complex in Manila. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. Melco Resorts & Entertainment Limited was incorporated in 2004 and is based in Central, Hong Kong. As of February 16, 2017, Melco Resorts & Entertainment Limited operates as a subsidiary of Melco Leisure and Entertainment Group Limited.
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