Reviewing Bally’s (NYSE:BALY) and Accel Entertainment (NYSE:ACEL)

Accel Entertainment (NYSE:ACEL) and Bally’s (NYSE:BALY) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Profitability

This table compares Accel Entertainment and Bally’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Accel Entertainment	2.75%	28.46%	6.81%
Bally’s	-23.55%	-72.98%	-4.55%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Accel Entertainment and Bally’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accel Entertainment	0	0	2	0	3.00
Bally’s	0	5	0	0	2.00

Accel Entertainment currently has a consensus price target of $15.50, indicating a potential upside of 33.91%. Bally’s has a consensus price target of $11.00, indicating a potential upside of 9.00%. Given Accel Entertainment’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Accel Entertainment is more favorable than Bally’s.

Earnings and Valuation

This table compares Accel Entertainment and Bally’s”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Accel Entertainment	$1.23 billion	0.79	$35.25 million	$0.40	28.94
Bally’s	$2.45 billion	0.20	-$567.75 million	($11.71)	-0.86

Accel Entertainment has higher earnings, but lower revenue than Bally’s. Bally’s is trading at a lower price-to-earnings ratio than Accel Entertainment, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

55.4% of Accel Entertainment shares are owned by institutional investors. Comparatively, 70.4% of Bally’s shares are owned by institutional investors. 18.3% of Accel Entertainment shares are owned by insiders. Comparatively, 74.9% of Bally’s shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Accel Entertainment has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, Bally’s has a beta of 1.86, meaning that its stock price is 86% more volatile than the S&P 500.

Summary

Accel Entertainment beats Bally’s on 10 of the 14 factors compared between the two stocks.

About Accel Entertainment

Accel Entertainment, Inc., together with its subsidiaries, operates as a distributed gaming operator in the United States. It is involved in the installation, maintenance, and operation of gaming terminals; redemption devices that disburse winnings and contain automated teller machine (ATM) functionality; and other amusement devices in authorized non-casino locations, such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery stores. The company also provides gaming solutions to the location partners. In addition, it operates stand-alone ATMs in gaming and non-gaming locations, as well as amusement devices, including jukeboxes, dartboards, pool tables, and other related entertainment equipment. The company is headquartered in Burr Ridge, Illinois.

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.