Comparing PENN Entertainment (NASDAQ:PENN) & Electronic Arts (NASDAQ:EA)

PENN Entertainment (NASDAQ:PENN) and Electronic Arts (NASDAQ:EA) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Risk & Volatility

PENN Entertainment has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Electronic Arts has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for PENN Entertainment and Electronic Arts, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PENN Entertainment	2	6	10	0	2.44
Electronic Arts	1	25	4	2	2.22

PENN Entertainment currently has a consensus price target of $22.60, indicating a potential upside of 56.13%. Electronic Arts has a consensus price target of $181.64, indicating a potential downside of 9.77%. Given PENN Entertainment’s stronger consensus rating and higher possible upside, equities research analysts clearly believe PENN Entertainment is more favorable than Electronic Arts.

Valuation & Earnings

This table compares PENN Entertainment and Electronic Arts”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PENN Entertainment	$6.82 billion	0.28	-$311.50 million	($6.35)	-2.28
Electronic Arts	$7.29 billion	6.89	$1.12 billion	$3.42	58.86

Electronic Arts has higher revenue and earnings than PENN Entertainment. PENN Entertainment is trading at a lower price-to-earnings ratio than Electronic Arts, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PENN Entertainment and Electronic Arts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PENN Entertainment	-1.12%	-4.36%	-0.85%
Electronic Arts	12.14%	15.30%	8.02%

Insider & Institutional Ownership

91.7% of PENN Entertainment shares are held by institutional investors. Comparatively, 90.2% of Electronic Arts shares are held by institutional investors. 2.7% of PENN Entertainment shares are held by company insiders. Comparatively, 0.2% of Electronic Arts shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Electronic Arts beats PENN Entertainment on 9 of the 15 factors compared between the two stocks.

About PENN Entertainment

PENN Entertainment, Inc., together with its subsidiaries, provides integrated entertainment, sports content, and casino gaming experiences. The company operates through five segments: Northeast, South, West, Midwest, and Interactive. It operates online sports betting in various jurisdictions; and iCasino under Hollywood Casino, L'Auberge, ESPN BET, and theScore Bet Sportsbook and Casino brands. The company's portfolio also includes PENN Play, customer loyalty program, which offers a set of rewards and experiences for business channels. In addition, it owns various trademarks and service marks, including Ameristar, Argosy, Boomtown, Hollywood Casino, Hollywood Gaming, L'Auberge, PENN Play, theScore, theScore Bet, theScore esports, and M Resort. The company was formerly known as Penn National Gaming, Inc. and changed its name to PENN Entertainment, Inc. in August 2022. PENN Entertainment, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and license games from others, including FIFA, Madden NFL, UFC, and Star Wars brands. The company licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, California.