Financial Review: Isle of Capri Casinos (ISLE) vs. Golden Entertainment (GDEN)

Isle of Capri Casinos (NASDAQ: ISLE) and Golden Entertainment (NASDAQ:GDEN) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitabiliy.

Insider & Institutional Ownership

53.9% of Isle of Capri Casinos shares are held by institutional investors. Comparatively, 28.4% of Golden Entertainment shares are held by institutional investors. 38.2% of Isle of Capri Casinos shares are held by insiders. Comparatively, 49.7% of Golden Entertainment shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Isle of Capri Casinos has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, Golden Entertainment has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Isle of Capri Casinos and Golden Entertainment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Isle of Capri Casinos 0 3 1 0 2.25
Golden Entertainment 0 1 0 0 2.00

Isle of Capri Casinos presently has a consensus target price of $20.50, indicating a potential downside of 10.79%. Golden Entertainment has a consensus target price of $13.00, indicating a potential downside of 36.49%. Given Isle of Capri Casinos’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Isle of Capri Casinos is more favorable than Golden Entertainment.

Profitability

This table compares Isle of Capri Casinos and Golden Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Isle of Capri Casinos 3.12% 21.43% 2.01%
Golden Entertainment 4.63% 6.99% 3.41%

Valuation and Earnings

This table compares Isle of Capri Casinos and Golden Entertainment’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Isle of Capri Casinos N/A N/A N/A $1.58 14.54
Golden Entertainment $418.82 million 1.09 $44.95 million $0.85 24.08

Golden Entertainment has higher revenue and earnings than Isle of Capri Casinos. Isle of Capri Casinos is trading at a lower price-to-earnings ratio than Golden Entertainment, indicating that it is currently the more affordable of the two stocks.

Summary

Isle of Capri Casinos beats Golden Entertainment on 7 of the 11 factors compared between the two stocks.

Isle of Capri Casinos Company Profile

Isle of Capri Casinos, Inc. is a developer, owner and operator of branded gaming facilities and related dining, lodging and entertainment facilities in regional markets in the United States. The Company owns or operates over 10 gaming and entertainment facilities in Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri and Pennsylvania. Collectively, these properties feature over 12,000 slot machines and 300 table games (including approximately 80 poker tables), 2,200 hotel rooms and 40 restaurants. The Company also operates a harness racing track at its casino in Florida. The Company operates under two brands: Isle and Lady Luck. The Company’s casino properties include Isle Casino Hotel-Black Hawk, Lady Luck Casino-Black Hawk, Pompano Park, Bettendorf, Marquette, Waterloo, Lake Charles, Lula, Vicksburg, Boonville, Cape Girardeau, Caruthersville, Kansas City and Nemacolin.

Golden Entertainment Company Profile

Golden Entertainment, Inc. is a group of gaming companies. The Company focuses on distributed gaming, including tavern gaming, and casino and resort operations. It operates through two segments: Distributed Gaming and Casinos. Its Distributed Gaming segment involves the installation, maintenance and operation of gaming and amusement devices in certain strategic, high-traffic, non-casino locations (such as grocery stores, convenience stores, restaurants, bars, taverns, saloons and liquor stores) in Nevada and Montana, and the operation of traditional, branded taverns targeting local patrons, primarily in the greater Las Vegas, Nevada metropolitan area. As of December 31, 2016, its distributed gaming operations consisted of approximately 10,400 gaming devices in approximately 960 locations. Its Casinos segment consists of the Rocky Gap Casino Resort in Flintstone, Maryland and three casinos in Pahrump, Nevada: Pahrump Nugget Hotel Casino, Gold Town Casino and Lakeside Casino & RV Park.

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