Financial Comparison: Ameristar Casinos (ASCA) and MGM Resorts International (MGM)

Ameristar Casinos (NASDAQ: ASCA) and MGM Resorts International (NYSE:MGM) are both cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.

Earnings and Valuation

This table compares Ameristar Casinos and MGM Resorts International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ameristar Casinos N/A N/A N/A $1.60 N/A
MGM Resorts International $9.46 billion 2.00 $1.10 billion $1.02 32.74

MGM Resorts International has higher revenue and earnings than Ameristar Casinos. Ameristar Casinos is trading at a lower price-to-earnings ratio than MGM Resorts International, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Ameristar Casinos has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, MGM Resorts International has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Ameristar Casinos and MGM Resorts International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ameristar Casinos 0 0 0 0 N/A
MGM Resorts International 0 4 12 0 2.75

MGM Resorts International has a consensus price target of $36.54, indicating a potential upside of 9.43%.

Insider & Institutional Ownership

83.0% of MGM Resorts International shares are held by institutional investors. 12.2% of MGM Resorts International shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

MGM Resorts International pays an annual dividend of $0.44 per share and has a dividend yield of 1.3%. Ameristar Casinos does not pay a dividend. MGM Resorts International pays out 43.1% of its earnings in the form of a dividend.

Profitability

This table compares Ameristar Casinos and MGM Resorts International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ameristar Casinos N/A N/A N/A
MGM Resorts International 5.44% 6.47% 2.31%

Summary

MGM Resorts International beats Ameristar Casinos on 9 of the 11 factors compared between the two stocks.

About Ameristar Casinos

Ameristar Casinos, Inc.(Ameristar), is a developer, owner and operator of casino entertainment facilities in local and regional markets. The Company has eight properties in seven markets. Its portfolio of casinos consists of: Ameristar Casino Resort Spa St. Charles (serving the St. Louis, Missouri metropolitan area); Ameristar Casino Hotel Kansas City (serving the Kansas City metropolitan area); Ameristar Casino Hotel Council Bluffs (serving Omaha, Nebraska and southwestern Iowa); Ameristar Casino Resort Spa Black Hawk (serving the Denver metropolitan area); Ameristar Casino Hotel Vicksburg (serving Jackson, Mississippi and Monroe, Louisiana); Ameristar Casino Hotel East Chicago (serving the Chicagoland area); and Cactus Petes Resort Casino and The Horseshu Hotel and Casino in Jackpot, Nevada (serving Idaho and the Pacific Northwest). In August 2013, Pinnacle Entertainment Inc completed the acquisition of Ameristar Casinos, Inc.

About MGM Resorts International

MGM Resorts International is a holding company. The Company, through its subsidiaries, owns and operates casino resorts. The Company operates in two segments: domestic resorts and MGM China. Its domestic resorts segment consists of non-gaming operations, including hotel, food and beverage, entertainment and other non-gaming amenities. Its casino operations feature a range of slots, table games, and race and sports book wagering. Its MGM China’s operations consist of the MGM Macau resort and casino, and the development of an integrated casino, hotel and entertainment resort on the Cotai Strip in Macau. Under its resort operation, the Company’s casino resorts offer gaming, hotel, convention, dining, entertainment, retail and other resort amenities. It owns Primm Valley Golf Club at the California/Nevada state line and Fallen Oak golf course in Saucier, Mississippi, among others. It owns and manages CityCenter Holdings, LLC, located between Bellagio and Monte Carlo.

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