Melco Crown Entertainment Limited (NASDAQ: MLCO) and Boyd Gaming Corporation (NYSE:BYD) are both mid-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Dividends

Melco Crown Entertainment Limited pays an annual dividend of $0.30 per share and has a dividend yield of 1.4%. Boyd Gaming Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Melco Crown Entertainment Limited pays out 57.7% of its earnings in the form of a dividend. Boyd Gaming Corporation pays out 5.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation and Earnings

This table compares Melco Crown Entertainment Limited and Boyd Gaming Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Melco Crown Entertainment Limited $4.92 billion 2.07 $1.11 billion $0.52 40.10
Boyd Gaming Corporation $2.29 billion 1.30 $525.83 million $3.81 6.94

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

Profitability

This table compares Melco Crown Entertainment Limited and Boyd Gaming Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Melco Crown Entertainment Limited 5.11% 9.20% 3.59%
Boyd Gaming Corporation 19.15% 13.31% 2.79%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Melco Crown Entertainment Limited and Boyd Gaming Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Melco Crown Entertainment Limited 1 5 9 0 2.53
Boyd Gaming Corporation 0 4 10 0 2.71

Melco Crown Entertainment Limited presently has a consensus price target of $21.42, suggesting a potential upside of 2.73%. Boyd Gaming Corporation has a consensus price target of $26.79, suggesting a potential upside of 1.23%. Given Melco Crown Entertainment Limited’s higher probable upside, research analysts plainly believe Melco Crown Entertainment Limited is more favorable than Boyd Gaming Corporation.

Risk & Volatility

Melco Crown Entertainment Limited has a beta of 1.91, meaning that its share price is 91% more volatile than the S&P 500. Comparatively, Boyd Gaming Corporation has a beta of 1.93, meaning that its share price is 93% more volatile than the S&P 500.

Insider and Institutional Ownership

39.8% of Melco Crown Entertainment Limited shares are held by institutional investors. Comparatively, 74.7% of Boyd Gaming Corporation shares are held by institutional investors. 29.2% of Boyd Gaming Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Boyd Gaming Corporation beats Melco Crown Entertainment Limited on 9 of the 16 factors compared between the two stocks.

Melco Crown Entertainment Limited Company Profile

Melco Resorts & Entertainment Limited, formerly Melco Crown Entertainment Limited, is a holding company. The Company, through its subsidiaries, develops, owns and operates casino gaming and entertainment casino resort facilities in Asia. It is principally engaged in the gaming and hospitality business in Asia and its principal operating and developmental activities occur in over two geographic areas, which include Macau and the Philippines. Its segments include City of Dreams, Altira Macau, Studio City, Mocha Clubs, City of Dreams Manila, and Corporate and Others. It has over three casino based operations in Macau, namely, City of Dreams, Altira Macau and Studio City, and non-casino based operations in Macau at its Mocha Clubs. It also has a casino based operation in the Philippines, City of Dreams Manila. It is developing the fifth hotel tower at City of Dreams in Cotai, Macau. Its other operations also include Taipa Square Casino, Macau operating within Hotel Taipa Square.

Boyd Gaming Corporation Company Profile

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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