Contrasting Churchill Downs (NASDAQ:CHDN) & Bally’s (NYSE:BALY)

Churchill Downs (NASDAQ:CHDN) and Bally’s (NYSE:BALY) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Institutional & Insider Ownership

82.6% of Churchill Downs shares are held by institutional investors. Comparatively, 70.4% of Bally’s shares are held by institutional investors. 5.9% of Churchill Downs shares are held by company insiders. Comparatively, 69.3% of Bally’s shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Churchill Downs and Bally’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Churchill Downs	0	1	10	0	2.91
Bally’s	2	3	0	0	1.60

Churchill Downs currently has a consensus price target of $134.89, suggesting a potential upside of 60.85%. Bally’s has a consensus price target of $11.75, suggesting a potential upside of 27.73%. Given Churchill Downs’ stronger consensus rating and higher probable upside, research analysts clearly believe Churchill Downs is more favorable than Bally’s.

Volatility & Risk

Churchill Downs has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, Bally’s has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500.

Earnings and Valuation

This table compares Churchill Downs and Bally’s”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Churchill Downs	$2.93 billion	2.00	$383.00 million	$5.83	14.38
Bally’s	$2.66 billion	0.17	-$701.10 million	($6.80)	-1.35

Churchill Downs has higher revenue and earnings than Bally’s. Bally’s is trading at a lower price-to-earnings ratio than Churchill Downs, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Churchill Downs	13.82%	42.16%	6.31%
Bally’s	-25.83%	-40.97%	-7.66%

Summary

Churchill Downs beats Bally’s on 12 of the 14 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 Bally’s

Bally’s Corp. is a global casino-entertainment company with a portfolio of casinos and resorts and online gaming businesses. It operates through the following segments: Casinos & Resorts, International Interactive, and North America Interactive. The Casinos & Resorts segment consists of the company’s casino and resort properties, a horse racetrack, and a golf course. The International Interactive segment includes the European and Asian operations of Gamesys, a business-to-consumer iCasino operator. The North America Interactive segment covers a portfolio of sports betting, iGaming, and free-to-play gaming brands such as Bally’s Interactive, SportCaller, and Live at the Bike, and the North American operations of Gamesys. The company was founded on March 1, 2004 and is headquartered in Providence, RI.