Comparing Red Rock Resorts (NASDAQ:RRR) & Super Group (SGHC) (NYSE:SGHC)

Red Rock Resorts (NASDAQ:RRR) and Super Group (SGHC) (NYSE:SGHC) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Volatility & Risk

Red Rock Resorts has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Super Group (SGHC) has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Dividends

Red Rock Resorts pays an annual dividend of $1.04 per share and has a dividend yield of 1.7%. Super Group (SGHC) pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. Red Rock Resorts pays out 33.4% of its earnings in the form of a dividend. Super Group (SGHC) pays out 41.7% 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. Red Rock Resorts is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Red Rock Resorts and Super Group (SGHC)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Rock Resorts	9.21%	61.67%	4.51%
Super Group (SGHC)	10.58%	42.85%	26.15%

Earnings & Valuation

This table compares Red Rock Resorts and Super Group (SGHC)”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	3.16	$188.07 million	$3.11	19.44
Super Group (SGHC)	$2.23 billion	3.12	$217.00 million	$0.48	28.71

Super Group (SGHC) has higher revenue and earnings than Red Rock Resorts. Red Rock Resorts is trading at a lower price-to-earnings ratio than Super Group (SGHC), indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Red Rock Resorts and Super Group (SGHC), as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Rock Resorts	1	3	12	0	2.69
Super Group (SGHC)	0	2	7	0	2.78

Red Rock Resorts presently has a consensus target price of $67.53, suggesting a potential upside of 11.72%. Super Group (SGHC) has a consensus target price of $17.57, suggesting a potential upside of 27.51%. Given Super Group (SGHC)’s stronger consensus rating and higher probable upside, analysts clearly believe Super Group (SGHC) is more favorable than Red Rock Resorts.

Institutional and Insider Ownership

47.8% of Red Rock Resorts shares are held by institutional investors. Comparatively, 5.1% of Super Group (SGHC) shares are held by institutional investors. 54.3% of Red Rock Resorts shares are held by company insiders. Comparatively, 10.4% of Super Group (SGHC) shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Red Rock Resorts beats Super Group (SGHC) on 9 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 Super Group (SGHC)

Super Group (SGHC) Limited operates as an online sports betting and gaming operator. It offers Betway, an online sports betting brand; and Spin, a multi-brand online casino offering. Super Group (SGHC) Limited is based in Saint Peter Port, Guernsey.