Red Rock Resorts (NASDAQ: RRR) and Boyd Gaming Corporation (NYSE:BYD) are both mid-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Dividends

Red Rock Resorts pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Boyd Gaming Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Red Rock Resorts pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Boyd Gaming Corporation pays out 5.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Red Rock Resorts and Boyd Gaming Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Red Rock Resorts $1.56 billion 0.97 $497.16 million $0.48 46.24
Boyd Gaming Corporation $2.29 billion 1.28 $525.83 million $3.81 6.81

Boyd Gaming Corporation has higher revenue and earnings than Red Rock Resorts. Boyd Gaming Corporation is trading at a lower price-to-earnings ratio than Red Rock Resorts, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Red Rock Resorts has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Boyd Gaming Corporation has a beta of 1.93, indicating that its share price is 93% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Red Rock Resorts and Boyd Gaming Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Rock Resorts 0 2 8 0 2.80
Boyd Gaming Corporation 0 4 10 0 2.71

Red Rock Resorts presently has a consensus price target of $26.28, indicating a potential upside of 18.40%. Boyd Gaming Corporation has a consensus price target of $26.79, indicating a potential upside of 3.18%. Given Red Rock Resorts’ stronger consensus rating and higher possible upside, analysts plainly believe Red Rock Resorts is more favorable than Boyd Gaming Corporation.

Insider and Institutional Ownership

62.5% of Red Rock Resorts shares are held by institutional investors. Comparatively, 74.7% of Boyd Gaming Corporation shares are held by institutional investors. 40.9% of Red Rock Resorts shares are held by company insiders. Comparatively, 29.2% of Boyd Gaming Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Red Rock Resorts and Boyd Gaming Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red Rock Resorts 1.44% 14.05% 2.50%
Boyd Gaming Corporation 19.15% 13.31% 2.79%

Summary

Boyd Gaming Corporation beats Red Rock Resorts on 11 of the 16 factors compared between the two stocks.

About Red Rock Resorts

Red Rock Resorts, Inc. is a gaming, development and management company. The Company’s segments include Las Vegas operations, Native American management, and Corporate and other. The Las Vegas operations segment includes all of its Las Vegas area casino properties and the Native American management segment includes its Native American management arrangements. It provides gaming and entertainment for residents of the Las Vegas regional market and visitors. Its Las Vegas portfolio includes approximately 10 gaming and entertainment facilities and over 10 smaller casinos, offering approximately 20,300 slot machines, over 350 table games and approximately 4,750 hotel rooms. The Company offers a range of gaming and non-gaming entertainment options. It also controls over seven gaming-entitled development sites consisting of approximately 398 acres in Las Vegas and Reno, Nevada. The Company manages and owns interest in Station Casinos LLC, which is the provider of gaming and entertainment.

About Boyd Gaming Corporation

Boyd Gaming Corporation is a multi-jurisdictional gaming company. The Company operated 24 wholly owned gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana and Mississippi, as of December 31, 2016. It operates through three segments: Las Vegas Locals, Downtown Las Vegas, and Midwest and South. It owns and operates a travel agency and a captive insurance company that underwrites travel-related insurance, each located in Hawaii. The Company’s Las Vegas Locals segment includes properties, such as Gold Coast Hotel and Casino, The Orleans Hotel and Casino, and Sam’s Town Hotel and Gambling Hall. The Downtown Las Vegas segment includes three properties, such as California Hotel and Casino Fremont Hotel and Casino and Main Street Station Casino, Brewery and Hotel Street Station. Its Midwest and South segment’s properties include Par-A-Dice Hotel Casino, Diamond Jo Dubuque, Diamond Jo Worth, Kansas Star Casino, Amelia Belle Casino and Evangeline Downs.

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