Financial Analysis: Churchill Downs (CHDN) versus Its Rivals

Churchill Downs (NASDAQ:CHDN) is one of 382 public companies in the “Hotels, Restaurants & Leisure” industry, but how does it contrast to its competitors? We will compare Churchill Downs to related businesses based on the strength of its earnings, dividends, institutional ownership, profitability, risk, valuation and analyst recommendations.

Risk and Volatility

Churchill Downs has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Churchill Downs’ competitors have a beta of 1.44, meaning that their average stock price is 44% more volatile than the S&P 500.

Insider & Institutional Ownership

82.6% of Churchill Downs shares are held by institutional investors. Comparatively, 48.7% of shares of all “Hotels, Restaurants & Leisure” companies are held by institutional investors. 5.9% of Churchill Downs shares are held by insiders. Comparatively, 22.1% of shares of all “Hotels, Restaurants & Leisure” companies are held 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.

Earnings and Valuation

This table compares Churchill Downs and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Churchill Downs	$3.00 billion	$383.00 million	15.38
Churchill Downs Competitors	$3.72 billion	$250.18 million	-156.46

Churchill Downs’ competitors have higher revenue, but lower earnings than Churchill Downs. Churchill Downs is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Churchill Downs pays an annual dividend of $0.46 per share and has a dividend yield of 0.5%. Churchill Downs pays out 7.1% of its earnings in the form of a dividend. As a group, “Hotels, Restaurants & Leisure” companies pay a dividend yield of 3.2% and pay out 39.1% of their earnings in the form of a dividend. Churchill Downs has increased its dividend for 14 consecutive years.

Profitability

This table compares Churchill Downs and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Churchill Downs	15.15%	39.90%	6.43%
Churchill Downs Competitors	8.52%	-40.63%	2.09%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Churchill Downs and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Churchill Downs	0	1	11	0	2.92
Churchill Downs Competitors	3807	17293	25614	906	2.50

Churchill Downs presently has a consensus target price of $126.70, indicating a potential upside of 27.92%. As a group, “Hotels, Restaurants & Leisure” companies have a potential upside of 58.90%. Given Churchill Downs’ competitors higher probable upside, analysts clearly believe Churchill Downs has less favorable growth aspects than its competitors.

Summary

Churchill Downs beats its competitors on 9 of the 15 factors compared.

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.