Head to Head Comparison: Capcom (OTCMKTS:CCOEY) & Red Rock Resorts (NASDAQ:RRR)

Red Rock Resorts (NASDAQ:RRR) and Capcom (OTCMKTS:CCOEY) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Dividends

Red Rock Resorts pays an annual dividend of $1.04 per share and has a dividend yield of 1.8%. Capcom pays an annual dividend of $0.08 per share and has a dividend yield of 0.7%. Red Rock Resorts pays out 33.2% of its earnings in the form of a dividend. Capcom pays out 15.7% 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.

Profitability

This table compares Red Rock Resorts and Capcom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Rock Resorts	9.35%	58.13%	4.72%
Capcom	32.82%	26.93%	21.51%

Volatility and Risk

Red Rock Resorts has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, Capcom has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Insider and Institutional Ownership

47.8% of Red Rock Resorts shares are held by institutional investors. 53.8% of Red Rock Resorts shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Red Rock Resorts and Capcom”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Rock Resorts	$2.01 billion	2.95	$188.07 million	$3.13	18.07
Capcom	$1.11 billion	11.08	$319.78 million	$0.51	22.71

Capcom has lower revenue, but higher earnings than Red Rock Resorts. Red Rock Resorts is trading at a lower price-to-earnings ratio than Capcom, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Red Rock Resorts and Capcom, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Rock Resorts	0	3	12	0	2.80
Capcom	0	1	0	0	2.00

Red Rock Resorts presently has a consensus price target of $71.36, indicating a potential upside of 26.18%. Given Red Rock Resorts’ stronger consensus rating and higher possible upside, research analysts clearly believe Red Rock Resorts is more favorable than Capcom.

Summary

Red Rock Resorts beats Capcom on 10 of the 16 factors compared between the two stocks.

About Red Rock Resorts

Red Rock Resorts, Inc., through its interest in Station Casinos LLC, develops and operates casino and entertainment properties in the United States. The company owns and operates gaming and entertainment facilities, including Durango Casino & Resort and smaller casinos in the Las Vegas regional market. The company was formerly known as Station Casinos Corp. and changed its name to Red Rock Resorts, Inc. in January 2016. Red Rock Resorts, Inc. was founded in 1976 and is based in Las Vegas, Nevada.

About Capcom

Capcom Co., Ltd. plans, develops, manufactures, sells, and distributes home video games, online games, mobile games, and arcade games in Japan and internationally. It operates through Digital Contents, Arcade Operations, Amusement Equipments, and Other Businesses segments. The Digital Contents segment develops and sells digital game content for consumer home video game platforms, as well as mobile content and PC online games. The Arcade Operations segment operates Plaza Capcom amusement facilities primarily in commercial complexes, as well as hosts various events. The Amusement Equipments segment is involved in the development, manufacture, and sale of software, frames and LCD devices for gaming machines. The Other Businesses segment engages in the adapting game content into movies, animated television programs, music CDs, and merchandise; and devoting resources to esports. Capcom Co., Ltd. was incorporated in 1979 and is headquartered in Osaka, Japan.