Critical Comparison: Churchill Downs (NASDAQ:CHDN) & Melco International Development (OTCMKTS:MDEVF)

Churchill Downs (NASDAQ:CHDN) and Melco International Development (OTCMKTS:MDEVF) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, dividends, profitability, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for Churchill Downs and Melco International Development, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Churchill Downs	1	0	11	0	2.83
Melco International Development	0	0	0	0	0.00

Churchill Downs presently has a consensus price target of $139.00, indicating a potential upside of 62.46%. Given Churchill Downs’ stronger consensus rating and higher possible upside, equities analysts plainly believe Churchill Downs is more favorable than Melco International Development.

Insider and Institutional Ownership

82.6% of Churchill Downs shares are held by institutional investors. 5.9% of Churchill Downs shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Churchill Downs and Melco International Development’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Churchill Downs	13.21%	43.50%	6.10%
Melco International Development	N/A	N/A	N/A

Risk and Volatility

Churchill Downs has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, Melco International Development has a beta of -0.2, indicating that its stock price is 120% less volatile than the S&P 500.

Earnings & Valuation

This table compares Churchill Downs and Melco International Development”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Churchill Downs	$2.93 billion	2.04	$383.00 million	$5.40	15.84
Melco International Development	$4.64 billion	0.16	-$100.59 million	N/A	N/A

Churchill Downs has higher earnings, but lower revenue than Melco International Development.

Summary

Churchill Downs beats Melco International Development on 11 of the 12 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 Melco International Development

Melco International Development Limited, an investment holding company, engages in the leisure and entertainment business in Macau, the Philippines, Cyprus, and Japan. It operates in two segments: Casino and Hospitality, and Others. The company develops, owns, and operates a network of casino gaming and entertainment casino resorts. It also involved in the development and operation of integrated casino and entertainment resort, and related activities; and operation of satellite casinos. In addition, the company provides financing, management, and property investment services. Further, it operates electronic gaming machines. The company was formerly known as The Macao Electric Lighting Company, Limited and changed its name to Melco International Development Limited in 1988. Melco International Development Limited was incorporated in 1910 and is headquartered in Central, Hong Kong.