Head-To-Head Review: DraftKings (NASDAQ:DKNG) vs. MGM Resorts International (NYSE:MGM)

DraftKings (NASDAQ:DKNG) and MGM Resorts International (NYSE:MGM) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Valuation and Earnings

This table compares DraftKings and MGM Resorts International”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DraftKings	$6.05 billion	2.07	$3.71 million	($0.04)	-635.75
MGM Resorts International	$17.54 billion	0.53	$205.86 million	$0.75	48.89

MGM Resorts International has higher revenue and earnings than DraftKings. DraftKings is trading at a lower price-to-earnings ratio than MGM Resorts International, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

DraftKings has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500. Comparatively, MGM Resorts International has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500.

Insider and Institutional Ownership

37.7% of DraftKings shares are owned by institutional investors. Comparatively, 68.1% of MGM Resorts International shares are owned by institutional investors. 51.2% of DraftKings shares are owned by insiders. Comparatively, 3.1% of MGM Resorts International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for DraftKings and MGM Resorts International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DraftKings	2	4	25	0	2.74
MGM Resorts International	4	7	8	1	2.30

DraftKings currently has a consensus target price of $37.12, indicating a potential upside of 45.97%. MGM Resorts International has a consensus target price of $41.94, indicating a potential upside of 14.36%. Given DraftKings’ stronger consensus rating and higher probable upside, equities research analysts plainly believe DraftKings is more favorable than MGM Resorts International.

Profitability

This table compares DraftKings and MGM Resorts International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DraftKings	0.06%	5.36%	0.96%
MGM Resorts International	1.17%	26.04%	2.19%

Summary

MGM Resorts International beats DraftKings on 9 of the 15 factors compared between the two stocks.

About DraftKings

DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. It provides online sports betting and casino, daily fantasy sports, media, and other consumer products, as well as retails sportsbooks. The company also engages in the design and development of sports betting and casino gaming software for online and retail sportsbooks, and iGaming operators. In addition, it offers DraftKings marketplace, a digital collectibles ecosystem designed for mainstream accessibility that offers curated NFT drops and supports secondary-market transactions. The company is headquartered in Boston, Massachusetts.

About MGM Resorts International

MGM Resorts International, through its subsidiaries, owns and operates casino, hotel, and entertainment resorts in the United States and internationally. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company's casino operations include slots and table games, as well as online sports betting and iGaming through BetMGM. Its customers include premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was incorporated in 1986 and is based in Las Vegas, Nevada.