Planet Fitness (NYSE:PLNT – Get Free Report) and Melco Resorts & Entertainment (NASDAQ:MLCO – Get Free Report) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.
Insider & Institutional Ownership
95.5% of Planet Fitness shares are held by institutional investors. Comparatively, 39.6% of Melco Resorts & Entertainment shares are held by institutional investors. 0.9% of Planet Fitness shares are held by company insiders. Comparatively, 57.1% of Melco Resorts & Entertainment shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Planet Fitness and Melco Resorts & Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Planet Fitness | 16.88% | -59.46% | 8.60% |
| Melco Resorts & Entertainment | 4.50% | -23.81% | 3.18% |
Risk and Volatility
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Planet Fitness and Melco Resorts & Entertainment, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Planet Fitness | 1 | 9 | 11 | 1 | 2.55 |
| Melco Resorts & Entertainment | 2 | 2 | 5 | 1 | 2.50 |
Planet Fitness currently has a consensus target price of $70.24, suggesting a potential upside of 38.22%. Melco Resorts & Entertainment has a consensus target price of $7.27, suggesting a potential upside of 56.61%. Given Melco Resorts & Entertainment’s higher probable upside, analysts plainly believe Melco Resorts & Entertainment is more favorable than Planet Fitness.
Earnings & Valuation
This table compares Planet Fitness and Melco Resorts & Entertainment”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Planet Fitness | $1.32 billion | 2.90 | $219.10 million | $2.95 | 17.23 |
| Melco Resorts & Entertainment | $5.16 billion | 0.34 | $185.04 million | $0.60 | 7.73 |
Planet Fitness has higher earnings, but lower revenue than Melco Resorts & Entertainment. Melco Resorts & Entertainment is trading at a lower price-to-earnings ratio than Planet Fitness, indicating that it is currently the more affordable of the two stocks.
Summary
Planet Fitness beats Melco Resorts & Entertainment on 10 of the 14 factors compared between the two stocks.
About Planet Fitness
Planet Fitness, Inc., together with its subsidiaries, franchises and operates fitness centers under the Planet Fitness brand. The company operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. The company is involved in franchising business in the United States, Puerto Rico, Canada, Panama, Mexico, and Australia. It engages in the sale of fitness equipment to franchisee-owned stores in the United States, Canada, and Mexico. In addition, the company operates corporate-owned stores in the United States and Canada. Planet Fitness, Inc. was founded in 1992 and is headquartered in Hampton, New Hampshire.
About Melco Resorts & Entertainment
Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia. It owns and operates City of Dreams, an integrated casino resort that has 500 gaming tables and 800 gaming machines; approximately 1,400 hotel rooms and suites; a wet stage performance theater with approximately 2,000 seats; approximately 30 restaurants and bars, and 150 retail outlets; and recreation and leisure facilities, including health and fitness clubs, swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 112 gaming tables and 56 gaming machines; 230 hotel rooms; various fine dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically-themed integrated entertainment, retail, and gaming resort that comprises 280 gaming tables and 980 gaming machines in Cotai, Macau. Further, the company owns and operates 7 Mocha Clubs with 1,034 gaming machines, as well as Taipa Square casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, a casino, hotel, retail, and entertainment integrated resort in the Entertainment City complex in Manila. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. Melco Resorts & Entertainment Limited was incorporated in 2004 and is based in Central, Hong Kong. As of February 16, 2017, Melco Resorts & Entertainment Limited operates as a subsidiary of Melco Leisure and Entertainment Group Limited.
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