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

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Bally’s and Churchill Downs, as reported by MarketBeat.com.

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

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

Institutional & Insider Ownership

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

Profitability

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

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

Volatility & Risk

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

Valuation and Earnings

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

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

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.

Summary

Churchill Downs beats Bally’s on 12 of the 14 factors compared between the two stocks.

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.

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.