Critical Comparison: Universal Entertainment (OTCMKTS:UETMF) and Wynn Resorts (NASDAQ:WYNN)

Wynn Resorts (NASDAQ:WYNN) and Universal Entertainment (OTCMKTS:UETMF) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Earnings & Valuation

This table compares Wynn Resorts and Universal Entertainment”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wynn Resorts	$7.14 billion	1.51	$327.33 million	$3.35	30.97
Universal Entertainment	$821.59 million	0.39	-$1.55 billion	($18.90)	-0.22

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

Risk & Volatility

Wynn Resorts has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Universal Entertainment has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Insider and Institutional Ownership

88.6% of Wynn Resorts shares are owned by institutional investors. 0.9% of Wynn Resorts shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Wynn Resorts and Universal Entertainment, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wynn Resorts	0	2	15	1	2.94
Universal Entertainment	0	0	0	0	0.00

Wynn Resorts currently has a consensus target price of $140.00, indicating a potential upside of 34.94%. Given Wynn Resorts’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Wynn Resorts is more favorable than Universal Entertainment.

Profitability

This table compares Wynn Resorts and Universal Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wynn Resorts	5.14%	-42.03%	3.53%
Universal Entertainment	-176.26%	23.25%	12.42%

Summary

Wynn Resorts beats Universal Entertainment on 13 of the 15 factors compared between the two stocks.

About Wynn Resorts

Wynn Resorts, Limited designs, develops, and operates integrated resorts. The company operates through four segments: Wynn Palace, Wynn Macau, Las Vegas Operations, and Encore Boston Harbor. The Wynn Palace segment operates private gaming salons and sky casinos; a luxury hotel tower with suites, and villas, including a health club, spa, salon, and pool; food and beverage outlets; retail space; meeting and convention space; and performance lake and floral art displays. The Wynn Macau segment operates casino space with private gaming salons, sky casinos, and a poker room; a luxury hotel tower, that include health clubs, spas, a salon, and a pool; food and beverage outlets; retail space; meeting and convention space; and Chinese zodiac-inspired ceiling attractions. The Las Vegas Operations segment operates casino space with private gaming salons, a sky casino, a poker room, and a race and sports book; a luxury hotel tower with suites, and villas, including swimming pools, private cabanas, full-service spas and salons, and a wedding chapel; food and beverage outlets; meeting and convention space; retail space; and theaters, nightclubs, a beach club. The Encore Boston Harbor segment operates casino space with gaming areas, and a poker room; a luxury hotel tower including a spa and salon; food and beverage outlets and a nightclub; retail space; meeting and convention space; and a waterfront park, floral displays, and water shuttle service. Wynn Resorts, Limited was incorporated in 2002 and is based in Las Vegas, Nevada.

About Universal Entertainment

Universal Entertainment Corporation, together with its subsidiaries, manufactures, develops, and sells pachislot and pachinko machines in Japan, Philippines, and internationally. The company operates in two segments, Amusement Equipment Business, and Integrated Resort Business. The company also develops and provides Falcon X, a peripheral system; Hot Stadium, a digital signage system; Universal Kingdom, a membership website for Android; and Slots Street, a social casino game; as well as operates OKADA MANILA, a casino resort in the Philippines. In addition, it operates casino, hotel, food and beverage, retail and leasing, entertainment, and real estate development businesses. The company was formerly known as Aruze Corp. and changed its name to Universal Entertainment Corporation in November 2009. Universal Entertainment Corporation was founded in 1969 and is headquartered in Tokyo, Japan.