Reviewing Churchill Downs (NASDAQ:CHDN) & Capcom (OTCMKTS:CCOEY)

Churchill Downs (NASDAQ:CHDN) and Capcom (OTCMKTS:CCOEY) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Churchill Downs	$2.73 billion	2.62	$426.80 million	$5.82	17.55
Capcom	$1.11 billion	12.86	$319.78 million	$0.44	30.53

Churchill Downs has higher revenue and earnings than Capcom. Churchill Downs is trading at a lower price-to-earnings ratio than Capcom, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Churchill Downs	15.22%	41.46%	6.10%
Capcom	30.10%	26.91%	20.87%

Institutional & Insider Ownership

82.6% of Churchill Downs shares are owned by institutional investors. 5.3% of Churchill Downs shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Churchill Downs pays an annual dividend of $0.41 per share and has a dividend yield of 0.4%. Capcom pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. Churchill Downs pays out 7.0% of its earnings in the form of a dividend. Capcom pays out 22.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Churchill Downs has raised its dividend for 14 consecutive years.

Risk & Volatility

Churchill Downs has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Capcom has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Churchill Downs and Capcom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Churchill Downs	0	0	11	0	3.00
Capcom	0	0	1	0	3.00

Churchill Downs currently has a consensus target price of $138.1818, suggesting a potential upside of 35.25%. Given Churchill Downs’ higher probable upside, analysts plainly believe Churchill Downs is more favorable than Capcom.

Summary

Churchill Downs beats Capcom on 11 of the 16 factors compared between the two stocks.

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.

About Capcom

Capcom Co., Ltd. plans, develops, manufactures, sells, and distributes home video games, online games, mobile games, and arcade games in Japan and internationally. It operates through Digital Contents, Arcade Operations, Amusement Equipments, and Other Businesses segments. The Digital Contents segment develops and sells digital game content for consumer home video game platforms, as well as mobile content and PC online games. The Arcade Operations segment operates Plaza Capcom amusement facilities primarily in commercial complexes, as well as hosts various events. The Amusement Equipments segment is involved in the development, manufacture, and sale of software, frames and LCD devices for gaming machines. The Other Businesses segment engages in the adapting game content into movies, animated television programs, music CDs, and merchandise; and devoting resources to esports. Capcom Co., Ltd. was incorporated in 1979 and is headquartered in Osaka, Japan.