Scientific Games Corp (NASDAQ: SGMS) and Multimedia Games Holding (NASDAQ:MGAM) are both cyclical consumer goods & services companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares Scientific Games Corp and Multimedia Games Holding’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scientific Games Corp -10.29% N/A -3.47%
Multimedia Games Holding N/A N/A N/A

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Scientific Games Corp and Multimedia Games Holding, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scientific Games Corp 0 3 2 0 2.40
Multimedia Games Holding 0 0 0 0 N/A

Scientific Games Corp currently has a consensus price target of $42.50, indicating a potential downside of 18.27%. Given Scientific Games Corp’s higher probable upside, analysts plainly believe Scientific Games Corp is more favorable than Multimedia Games Holding.

Institutional & Insider Ownership

64.2% of Scientific Games Corp shares are owned by institutional investors. 40.6% of Scientific Games Corp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Scientific Games Corp and Multimedia Games Holding’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Scientific Games Corp $2.88 billion 1.62 -$353.70 million ($3.50) -14.86
Multimedia Games Holding N/A N/A N/A $1.03 35.38

Multimedia Games Holding has higher revenue, but lower earnings than Scientific Games Corp. Scientific Games Corp is trading at a lower price-to-earnings ratio than Multimedia Games Holding, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Scientific Games Corp has a beta of 2.64, meaning that its share price is 164% more volatile than the S&P 500. Comparatively, Multimedia Games Holding has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Summary

Scientific Games Corp beats Multimedia Games Holding on 6 of the 9 factors compared between the two stocks.

Scientific Games Corp Company Profile

Scientific Games Corporation is a developer of technology-based products and services and associated content for the gaming, lottery and interactive gaming industries. Its segments include Gaming, Lottery and Interactive. Its portfolio includes gaming machines and game content, casino management systems, table game products and services, instant and draw-based lottery games, server-based gaming and lottery systems, sports betting technology, lottery content and services, loyalty and rewards programs, interactive gaming and social casino solutions. Gaming segment designs, develops, manufactures, markets and distributes a portfolio of gaming products and services. Lottery segment consists of its systems-based services and product sales business and its instant games business. Its Interactive business segment includes social (non-wagering) gaming and interactive real-money gaming (RMG). Its games are available on Facebook, Amazon.com, the Apple app store and Android app on Google play.

Multimedia Games Holding Company Profile

Multimedia Games Holding Company, Inc. (Multimedia Games), incorporated on August 30, 1991, is engaged in designing, manufacturing and supplying gaming machines and systems to commercial and Native American casino operators in North America, as well as, domestic and selected international lottery operators, and commercial bingo gaming facility operators. The Company’s revenues are generated from the operation of gaming machines in revenue-sharing arrangements and from the sale of gaming machines and systems that features licensed game themes. Multimedia Games places its revenue-sharing machines and sells its gaming machines and systems in Class II, Class III, video lottery terminal (VLT) and electronic bingo settings. The Company has added eTables to its product portfolio with the acquisition of PokerTek, Inc. Additionally, it offers cash access and compliance solutions.

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