Churchill Downs (NASDAQ:CHDN) vs. RCI Hospitality (NASDAQ:RICK) Head to Head Survey

Churchill Downs (NASDAQ:CHDN) and RCI Hospitality (NASDAQ:RICK) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Churchill Downs and RCI Hospitality, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Churchill Downs	0	1	10	0	2.91
RCI Hospitality	1	0	0	0	1.00

Churchill Downs currently has a consensus price target of $134.89, indicating a potential upside of 60.33%. Given Churchill Downs’ stronger consensus rating and higher probable upside, analysts plainly believe Churchill Downs is more favorable than RCI Hospitality.

Institutional & Insider Ownership

82.6% of Churchill Downs shares are owned by institutional investors. Comparatively, 53.8% of RCI Hospitality shares are owned by institutional investors. 5.9% of Churchill Downs shares are owned by insiders. Comparatively, 11.4% of RCI Hospitality shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Churchill Downs has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, RCI Hospitality has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares Churchill Downs and RCI Hospitality”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Churchill Downs	$2.93 billion	2.00	$383.00 million	$5.83	14.43
RCI Hospitality	$279.43 million	0.78	$10.81 million	($0.41)	-69.59

Churchill Downs has higher revenue and earnings than RCI Hospitality. RCI Hospitality is trading at a lower price-to-earnings ratio than Churchill Downs, indicating that it is currently the more affordable of the two stocks.

Dividends

Churchill Downs pays an annual dividend of $0.44 per share and has a dividend yield of 0.5%. RCI Hospitality pays an annual dividend of $0.32 per share and has a dividend yield of 1.1%. Churchill Downs pays out 7.5% of its earnings in the form of a dividend. RCI Hospitality pays out -78.0% 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. Churchill Downs has increased its dividend for 14 consecutive years and RCI Hospitality has increased its dividend for 4 consecutive years. RCI Hospitality is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Churchill Downs and RCI Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Churchill Downs	13.82%	42.16%	6.31%
RCI Hospitality	-1.48%	-1.74%	-0.72%

Summary

Churchill Downs beats RCI Hospitality on 13 of the 17 factors compared between the two stocks.

About Churchill Downs

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. The company operates pari-mutuel gaming entertainment venues; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; retail sports books; casino gaming; and Terre Haute Casino Resort. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.

About RCI Hospitality

RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company’s wholly-owned subsidiaries own and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. Wholly-owned subsidiaries also operate restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company founded in 1983 as Rick's Cabaret International, Inc., changed its name to RCI Hospitality Holdings, Inc. in August 2014, and is based in Houston, Texas.