Melco Resorts & Entertainment (NASDAQ:MLCO – Get Free Report) and Meridian (NASDAQ:MRDN – Get Free Report) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.
Analyst Recommendations
This is a summary of current ratings and target prices for Melco Resorts & Entertainment and Meridian, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Melco Resorts & Entertainment | 1 | 3 | 5 | 1 | 2.60 |
| Meridian | 1 | 0 | 0 | 0 | 1.00 |
Melco Resorts & Entertainment currently has a consensus target price of $9.06, indicating a potential upside of 65.93%. Meridian has a consensus target price of $21.60, indicating a potential upside of 96.36%. Given Meridian’s higher probable upside, analysts clearly believe Meridian is more favorable than Melco Resorts & Entertainment.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Melco Resorts & Entertainment | 4.33% | -31.91% | 3.98% |
| Meridian | -45.94% | -99.76% | -53.85% |
Risk and Volatility
Melco Resorts & Entertainment has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Meridian has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.
Insider & Institutional Ownership
39.6% of Melco Resorts & Entertainment shares are owned by institutional investors. Comparatively, 2.7% of Meridian shares are owned by institutional investors. 57.1% of Melco Resorts & Entertainment shares are owned by insiders. Comparatively, 9.4% of Meridian shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Melco Resorts & Entertainment and Meridian”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Melco Resorts & Entertainment | $5.16 billion | 0.43 | $185.04 million | $0.58 | 9.41 |
| Meridian | $190.24 million | 0.73 | -$89.90 million | ($7.45) | -1.48 |
Melco Resorts & Entertainment has higher revenue and earnings than Meridian. Meridian is trading at a lower price-to-earnings ratio than Melco Resorts & Entertainment, indicating that it is currently the more affordable of the two stocks.
Summary
Melco Resorts & Entertainment beats Meridian on 12 of the 15 factors compared between the two stocks.
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.
About Meridian
Meridian Holdings Inc is engaged in the online gaming and betting business, providing sports betting, online casino, and gaming operations across multiple jurisdictions in Europe, Africa, and Central and South America. The company has three reportable segments: MeridianBet Group, GMAG, and RKings & CFAC. The MeridianBet Group segment includes retail and online sports betting, casinos, and related gaming operations. The GMAG segment focuses on the resale of third-party gaming content, mainly serving customers in the Asia-Pacific region. The RKings & CFAC segment is involved in pay-to-enter prize competitions and trade promotions conducted in the United Kingdom and Australia. It generates the majority of its revenue from the MeridianBet Group segment.
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