Universal Entertainment (OTCMKTS:UETMF) versus DraftKings (NASDAQ:DKNG) Critical Analysis

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

Earnings and Valuation

This table compares DraftKings and Universal Entertainment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DraftKings	$4.77 billion	8.20	-$507.29 million	($0.83)	-52.94
Universal Entertainment	$1.28 billion	0.44	$201.92 million	($1.28)	-5.63

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

Volatility & Risk

DraftKings has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Universal Entertainment has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Insider & Institutional Ownership

37.7% of DraftKings shares are owned by institutional investors. 51.2% of DraftKings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for DraftKings and Universal Entertainment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DraftKings	0	1	27	0	2.96
Universal Entertainment	0	0	0	0	0.00

DraftKings presently has a consensus price target of $54.00, suggesting a potential upside of 22.89%. Given DraftKings’ stronger consensus rating and higher possible upside, research analysts plainly believe DraftKings is more favorable than Universal Entertainment.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DraftKings	-7.97%	-34.55%	-8.51%
Universal Entertainment	N/A	N/A	N/A

Summary

DraftKings beats Universal Entertainment on 9 of the 14 factors compared between the two stocks.

About DraftKings

DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. It provides online sports betting and casino, daily fantasy sports, media, and other consumer products, as well as retails sportsbooks. The company also engages in the design and development of sports betting and casino gaming software for online and retail sportsbooks, and iGaming operators. In addition, it offers DraftKings marketplace, a digital collectibles ecosystem designed for mainstream accessibility that offers curated NFT drops and supports secondary-market transactions. The company is headquartered in Boston, Massachusetts.

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.