Critical Survey: Mattersight (MATR) versus Scientific Games (SGMS)

Mattersight (NASDAQ: MATR) and Scientific Games (NASDAQ:SGMS) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Insider & Institutional Ownership

44.5% of Mattersight shares are owned by institutional investors. Comparatively, 66.0% of Scientific Games shares are owned by institutional investors. 28.3% of Mattersight shares are owned by insiders. Comparatively, 40.6% of Scientific Games shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Mattersight and Scientific Games’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mattersight $46.51 million 1.86 -$16.32 million ($0.49) -5.31
Scientific Games $3.08 billion 1.75 -$242.30 million ($2.23) -26.59

Mattersight has higher earnings, but lower revenue than Scientific Games. Scientific Games is trading at a lower price-to-earnings ratio than Mattersight, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Mattersight has a beta of 0.29, indicating that its share price is 71% less volatile than the S&P 500. Comparatively, Scientific Games has a beta of 2.53, indicating that its share price is 153% more volatile than the S&P 500.

Profitability

This table compares Mattersight and Scientific Games’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mattersight -35.09% N/A -31.41%
Scientific Games -10.83% N/A -2.35%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Mattersight and Scientific Games, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mattersight 0 3 0 0 2.00
Scientific Games 0 1 4 0 2.80

Mattersight currently has a consensus target price of $3.04, indicating a potential upside of 16.73%. Scientific Games has a consensus target price of $56.00, indicating a potential downside of 5.56%. Given Mattersight’s higher possible upside, research analysts plainly believe Mattersight is more favorable than Scientific Games.

Summary

Scientific Games beats Mattersight on 8 of the 12 factors compared between the two stocks.

About Mattersight

Mattersight Corporation provides behavioral analytics services in the United States. The company provides predictive behavioral routing and workstyle, performance management, quality assurance, predictive analytics, and marketing managed services. It serves companies in the healthcare, insurance, financial service, technology, telecommunication, cable, utility, education, hospitality, and government industries. The company was formerly known as eLoyalty Corporation and changed its name to Mattersight Corporation in May 2011. Mattersight Corporation was founded in 1994 and is headquartered in Chicago, Illinois.

About Scientific Games

Scientific Games Corporation develops technology-based products and services, and related content for the gaming, lottery, and interactive gaming industries worldwide. The company's Gaming segment sells new and used gaming machines, electronic table systems, video lottery terminals (VLTs), conversion game kits, and spare parts; slot, casino, and table-management systems; table products, including shufflers; and perpetual licenses to proprietary table games. It also leases VLTs and electronic table games, game themes, or other licensing arrangements; and provides installation and support services for casino management systems, such as ongoing hardware maintenance and software upgrade services. The company's Lottery segment designs, prints, and sells instant lottery games, as well as offers instant game-related services comprising game design, sales and marketing support, and inventory management; and provides lottery systems, including hardware, software, and instant game validation systems. It is also involved in supplying player loyalty programs, as well as providing merchandising services and interactive marketing campaigns; and sublicensing brands for lottery products, as well as providing lottery-related promotional products. In addition, this segment provides software, hardware, and related services for lottery operations, including draw systems, instant ticket validation systems, and sports wagering and keno systems; and lottery systems software maintenance and support services. The company's Interactive segment operates social casino-style, slot-based, and bingo-based games through Facebook, iOS, Android, and various other desktop and mobile platforms; and provides content through remote game server technology, to licensed online casino operators on desktop and mobile platforms, as well as play-for-fun and play-for-free white-label gaming for land-based casinos. Scientific Games Corporation was founded in 1984 and is headquartered in Las Vegas, Nevada.

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