Critical Contrast: Electronic Arts (NASDAQ:EA) & Archon (OTCMKTS:ARHN)

Electronic Arts (NASDAQ:EA) and Archon (OTCMKTS:ARHN) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Institutional & Insider Ownership

90.2% of Electronic Arts shares are held by institutional investors. 0.2% of Electronic Arts shares are held by insiders. Comparatively, 80.0% of Archon shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Electronic Arts and Archon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Electronic Arts	0	15	10	1	2.46
Archon	0	0	0	0	0.00

Electronic Arts currently has a consensus target price of $162.92, indicating a potential upside of 10.24%. Given Electronic Arts’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Electronic Arts is more favorable than Archon.

Volatility and Risk

Electronic Arts has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Archon has a beta of 0.03, indicating that its share price is 97% less volatile than the S&P 500.

Earnings & Valuation

This table compares Electronic Arts and Archon”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Electronic Arts	$7.46 billion	4.98	$1.12 billion	$4.24	34.86
Archon	N/A	N/A	N/A	N/A	N/A

Electronic Arts has higher revenue and earnings than Archon.

Profitability

This table compares Electronic Arts and Archon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Electronic Arts	15.02%	18.73%	10.37%
Archon	N/A	N/A	N/A

Summary

Electronic Arts beats Archon on 10 of the 11 factors compared between the two stocks.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and license games from others, including FIFA, Madden NFL, UFC, and Star Wars brands. The company licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, California.

About Archon

Archon Corporation, through its subsidiary, Pioneer Hotel Inc., engages in the ownership, management, and operation of casinos and hotels in the United States. It operates the Pioneer Hotel & Gambling Hall (the Pioneer) in Laughlin, Nevada that consists of a casino. The company also owns real estate properties on Las Vegas Boulevard South in Las Vegas, Nevada; and rental properties that include commercial office space in Dorchester, Massachusetts. Archon Corporation was founded in 1991 and is based in Laughlin, Nevada.