DraftKings (NASDAQ:DKNG) versus MGM Resorts International (NYSE:MGM) Financial Contrast

MGM Resorts International (NYSE:MGM) and DraftKings (NASDAQ:DKNG) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Volatility & Risk

MGM Resorts International has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, DraftKings has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for MGM Resorts International and DraftKings, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGM Resorts International	4	7	8	1	2.30
DraftKings	2	5	24	0	2.71

MGM Resorts International presently has a consensus target price of $41.94, suggesting a potential upside of 16.70%. DraftKings has a consensus target price of $36.76, suggesting a potential upside of 53.92%. Given DraftKings’ stronger consensus rating and higher possible upside, analysts clearly believe DraftKings is more favorable than MGM Resorts International.

Institutional and Insider Ownership

68.1% of MGM Resorts International shares are held by institutional investors. Comparatively, 37.7% of DraftKings shares are held by institutional investors. 3.1% of MGM Resorts International shares are held by company insiders. Comparatively, 47.1% of DraftKings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares MGM Resorts International and DraftKings”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGM Resorts International	$17.54 billion	0.52	$205.86 million	$0.75	47.91
DraftKings	$6.05 billion	1.94	$3.71 million	($0.04)	-597.15

MGM Resorts International has higher revenue and earnings than DraftKings. DraftKings is trading at a lower price-to-earnings ratio than MGM Resorts International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares MGM Resorts International and DraftKings’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MGM Resorts International	1.17%	26.04%	2.19%
DraftKings	0.06%	5.36%	0.96%

Summary

MGM Resorts International beats DraftKings on 9 of the 15 factors compared between the two stocks.

About MGM Resorts International

MGM Resorts International, through its subsidiaries, owns and operates casino, hotel, and entertainment resorts in the United States and internationally. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company's casino operations include slots and table games, as well as online sports betting and iGaming through BetMGM. Its customers include premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was incorporated in 1986 and is based in Las Vegas, Nevada.

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.