Critical Review: Caesars Acquisition (CACQ) & Monarch Casino & Resort (MCRI)
Caesars Acquisition (NASDAQ: CACQ) and Monarch Casino & Resort (NASDAQ:MCRI) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
Risk and Volatility
Caesars Acquisition has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Monarch Casino & Resort has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.
Valuation and Earnings
This table compares Caesars Acquisition and Monarch Casino & Resort’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Monarch Casino & Resort||$224.35 million||2.68||$56.76 million||$1.48||23.14|
Monarch Casino & Resort has higher revenue and earnings than Caesars Acquisition. Caesars Acquisition is trading at a lower price-to-earnings ratio than Monarch Casino & Resort, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and recommmendations for Caesars Acquisition and Monarch Casino & Resort, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Monarch Casino & Resort||0||2||2||0||2.50|
Monarch Casino & Resort has a consensus price target of $48.75, indicating a potential upside of 42.38%. Given Monarch Casino & Resort’s higher probable upside, analysts clearly believe Monarch Casino & Resort is more favorable than Caesars Acquisition.
This table compares Caesars Acquisition and Monarch Casino & Resort’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Monarch Casino & Resort||11.77%||11.16%||8.92%|
Insider and Institutional Ownership
56.3% of Caesars Acquisition shares are held by institutional investors. Comparatively, 56.0% of Monarch Casino & Resort shares are held by institutional investors. 0.2% of Caesars Acquisition shares are held by company insiders. Comparatively, 27.6% of Monarch Casino & Resort shares are held by company 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.
Monarch Casino & Resort beats Caesars Acquisition on 7 of the 11 factors compared between the two stocks.
Caesars Acquisition Company Profile
Caesars Acquisition Company (CAC) owns voting membership units of Caesars Growth Partners, LLC (CGP LLC), a joint venture between CAC and subsidiaries of Caesars Entertainment Corporation (CEC or Caesars Entertainment). CAC serves as CGP LLC’s managing member and sole holder of its outstanding voting units. CGP LLC is a casino asset and entertainment company. Through its relationship with Caesars Entertainment, CGP LLC has the ability to access Caesars Entertainment’s management know-how, brand equity, Total Rewards loyalty program and structural synergies. As of December 31, 2016, CGP LLC’s Interactive Entertainment business consisted of two operating units: The World Series of Poker (WSOP) and regulated online real money gaming (RMG). CGP LLC’s casino properties and developments include Planet Hollywood Resort & Casino in Las Vegas (Planet Hollywood), The LINQ Hotel & Casino, Bally’s Las Vegas, The Cromwell, Horseshoe Baltimore Casino (Horseshoe Baltimore) and Harrah’s New Orleans.
Monarch Casino & Resort Company Profile
Monarch Casino & Resort, Inc. (Monarch), through its subsidiary, owns and operates the Atlantis Casino Resort Spa (the Atlantis), a hotel/casino facility in Reno, Nevada. The Company also owns and operates Monarch Casino Black Hawk. The Company’s segments include Atlantis and Monarch Casino Black Hawk. The Atlantis is located approximately three miles south of downtown in the area of Reno, Nevada. As of December 31, 2016, the Atlantis featured approximately 61,000 square feet of casino space; 824 guest rooms and suites; eight food outlets; two espresso and pastry bars; a 30,000 square foot health spa and salon with an enclosed year-round pool; two retail outlets offering clothing and traditional gift shop merchandise; an 8,000 square-foot family entertainment center, and approximately 52,000 square feet of banquet, convention and meeting room space.
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