Financial Comparison: GameStop (NYSE:GME) versus Universal Entertainment (OTCMKTS:UETMF)

GameStop (NYSE:GME) and Universal Entertainment (OTCMKTS:UETMF) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Valuation and Earnings

This table compares GameStop and Universal Entertainment”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GameStop	$3.82 billion	2.63	$131.30 million	$0.46	48.79
Universal Entertainment	$1.28 billion	0.39	$201.92 million	($1.28)	-4.97

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

Insider and Institutional Ownership

29.2% of GameStop shares are held by institutional investors. 8.6% of GameStop shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for GameStop and Universal Entertainment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GameStop	1	0	0	0	1.00
Universal Entertainment	0	0	0	0	0.00

GameStop currently has a consensus target price of $13.50, indicating a potential downside of 39.85%. Given GameStop’s stronger consensus rating and higher possible upside, analysts clearly believe GameStop is more favorable than Universal Entertainment.

Profitability

This table compares GameStop and Universal Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GameStop	5.67%	5.25%	3.99%
Universal Entertainment	N/A	N/A	N/A

Risk & Volatility

GameStop has a beta of -0.72, indicating that its stock price is 172% less volatile than the S&P 500. Comparatively, Universal Entertainment has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Summary

GameStop beats Universal Entertainment on 11 of the 13 factors compared between the two stocks.

About GameStop

GameStop Corp., a specialty retailer, provides games and entertainment products through its stores and ecommerce platforms in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, and virtual reality products; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads. It sells collectibles comprising apparel, toys, trading cards, gadgets, and other retail products for pop culture and technology enthusiasts, as well as engages in the digital asset wallet and NFT marketplace activities. The company operates stores and ecommerce sites under the GameStop, EB Games, and Micromania brands; and pop culture themed stores that sell collectibles, apparel, gadgets, electronics, toys, and other retail products under the Zing Pop Culture brand, as well as offers Game Informer magazine, a print and digital gaming publication. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1996 and is headquartered in Grapevine, Texas.

About Universal Entertainment

Universal Entertainment Corporation, together with its subsidiaries, manufactures, develops, and sells pachislot and pachinko machines in Japan, Philippines, and internationally. The company operates in two segments, Amusement Equipment Business, and Integrated Resort Business. The company also develops and provides Falcon X, a peripheral system; Hot Stadium, a digital signage system; Universal Kingdom, a membership website for Android; and Slots Street, a social casino game; as well as operates OKADA MANILA, a casino resort in the Philippines. In addition, it operates casino, hotel, food and beverage, retail and leasing, entertainment, and real estate development businesses. The company was formerly known as Aruze Corp. and changed its name to Universal Entertainment Corporation in November 2009. Universal Entertainment Corporation was founded in 1969 and is headquartered in Tokyo, Japan.