Scientific Games Corp (NASDAQ: SGMS) and Multimedia Games Holding (NASDAQ:MGAM) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.
Risk and Volatility
Scientific Games Corp has a beta of 2.64, suggesting that its share price is 164% more volatile than the S&P 500. Comparatively, Multimedia Games Holding has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.
62.7% of Scientific Games Corp shares are owned by institutional investors. 40.6% of Scientific Games Corp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for Scientific Games Corp and Multimedia Games Holding, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Scientific Games Corp||0||3||2||0||2.40|
|Multimedia Games Holding||0||0||0||0||N/A|
Scientific Games Corp presently has a consensus price target of $42.50, suggesting a potential downside of 9.86%. Given Scientific Games Corp’s higher probable upside, analysts plainly believe Scientific Games Corp is more favorable than Multimedia Games Holding.
This table compares Scientific Games Corp and Multimedia Games Holding’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Scientific Games Corp||-10.29%||N/A||-3.47%|
|Multimedia Games Holding||N/A||N/A||N/A|
Earnings and Valuation
This table compares Scientific Games Corp and Multimedia Games Holding’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Scientific Games Corp||$2.88 billion||1.47||-$353.70 million||($3.50)||-13.47|
|Multimedia Games Holding||N/A||N/A||N/A||$1.03||35.38|
Multimedia Games Holding has higher revenue, but lower earnings than Scientific Games Corp. Scientific Games Corp is trading at a lower price-to-earnings ratio than Multimedia Games Holding, indicating that it is currently the more affordable of the two stocks.
Scientific Games Corp beats Multimedia Games Holding on 6 of the 9 factors compared between the two stocks.
About Scientific Games Corp
Scientific Games Corporation is a developer of technology-based products and services and associated content for the gaming, lottery and interactive gaming industries. Its segments include Gaming, Lottery and Interactive. Its portfolio includes gaming machines and game content, casino management systems, table game products and services, instant and draw-based lottery games, server-based gaming and lottery systems, sports betting technology, lottery content and services, loyalty and rewards programs, interactive gaming and social casino solutions. Gaming segment designs, develops, manufactures, markets and distributes a portfolio of gaming products and services. Lottery segment consists of its systems-based services and product sales business and its instant games business. Its Interactive business segment includes social (non-wagering) gaming and interactive real-money gaming (RMG). Its games are available on Facebook, Amazon.com, the Apple app store and Android app on Google play.
About Multimedia Games Holding
Multimedia Games Holding Company, Inc. (Multimedia Games), incorporated on August 30, 1991, is engaged in designing, manufacturing and supplying gaming machines and systems to commercial and Native American casino operators in North America, as well as, domestic and selected international lottery operators, and commercial bingo gaming facility operators. The Company’s revenues are generated from the operation of gaming machines in revenue-sharing arrangements and from the sale of gaming machines and systems that features licensed game themes. Multimedia Games places its revenue-sharing machines and sells its gaming machines and systems in Class II, Class III, video lottery terminal (VLT) and electronic bingo settings. The Company has added eTables to its product portfolio with the acquisition of PokerTek, Inc. Additionally, it offers cash access and compliance solutions.
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