Analyzing Dine Brands Global (NYSE:DIN) and Red Rock Resorts (NASDAQ:RRR)

Red Rock Resorts (NASDAQ:RRR) and Dine Brands Global (NYSE:DIN) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, earnings, profitability and institutional ownership.

Valuation & Earnings

This table compares Red Rock Resorts and Dine Brands Global”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	2.76	$188.07 million	$2.83	18.65
Dine Brands Global	$879.30 million	0.40	$17.10 million	$0.47	59.27

Red Rock Resorts has higher revenue and earnings than Dine Brands Global. Red Rock Resorts is trading at a lower price-to-earnings ratio than Dine Brands Global, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Red Rock Resorts and Dine Brands Global, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Rock Resorts	0	4	16	1	2.86
Dine Brands Global	0	9	0	0	2.00

Red Rock Resorts presently has a consensus target price of $71.94, suggesting a potential upside of 36.28%. Dine Brands Global has a consensus target price of $32.83, suggesting a potential upside of 17.86%. Given Red Rock Resorts’ stronger consensus rating and higher probable upside, research analysts clearly believe Red Rock Resorts is more favorable than Dine Brands Global.

Dividends

Red Rock Resorts pays an annual dividend of $1.04 per share and has a dividend yield of 2.0%. Dine Brands Global pays an annual dividend of $0.76 per share and has a dividend yield of 2.7%. Red Rock Resorts pays out 36.7% of its earnings in the form of a dividend. Dine Brands Global pays out 161.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

47.8% of Red Rock Resorts shares are held by institutional investors. Comparatively, 92.8% of Dine Brands Global shares are held by institutional investors. 54.3% of Red Rock Resorts shares are held by insiders. Comparatively, 6.7% of Dine Brands Global shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Red Rock Resorts has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500. Comparatively, Dine Brands Global has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Profitability

This table compares Red Rock Resorts and Dine Brands Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Rock Resorts	8.43%	56.19%	4.01%
Dine Brands Global	0.75%	-20.34%	3.17%

Summary

Red Rock Resorts beats Dine Brands Global on 14 of the 17 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 Dine Brands Global

Dine Brands Global, Inc., together with its subsidiaries, owns, franchises, and operates restaurants in the United States and internationally. The company operates through six segments: Applebee's Franchise Operations, International House of Pancakes (IHOP) Franchise Solutions, Fuzzy's franchise operations, Rental Operations, Financing Operations, and Company-Operated Restaurant Operations. It owns and franchises three restaurant concepts, including Applebee's Neighborhood Grill + Bar within the casual dining category; and IHOP in the family dining category of the restaurant industry; Fuzzy's Taco Shop within the fast-casual dining category. In addition, its Applebee's restaurants offer American fare with drinks and local draft beers; IHOP restaurants provide full table services, food and beverage; and Fuzzy's Taco Shop offers baja-style mexican food like baja tacos, chips and queso, guacamole and salsa made in house, and a full bar including margaritas, and cold draft beer. The company was formerly known as DineEquity, Inc. and changed its name to Dine Brands Global, Inc. in February 2018. Dine Brands Global, Inc. was founded in 1958 and is headquartered in Pasadena, California.