Contrasting Red Rock Resorts (NASDAQ:RRR) & Accel Entertainment (NYSE:ACEL)

Accel Entertainment (NYSE:ACEL) and Red Rock Resorts (NASDAQ:RRR) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.

Volatility & Risk

Accel Entertainment has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Red Rock Resorts has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Valuation & Earnings

This table compares Accel Entertainment and Red Rock Resorts”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Accel Entertainment	$1.33 billion	0.77	$51.47 million	$0.60	20.87
Red Rock Resorts	$2.01 billion	3.34	$188.07 million	$3.11	20.58

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Accel Entertainment and Red Rock Resorts, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accel Entertainment	0	2	4	0	2.67
Red Rock Resorts	1	2	13	1	2.82

Accel Entertainment currently has a consensus price target of $14.67, indicating a potential upside of 17.14%. Red Rock Resorts has a consensus price target of $69.38, indicating a potential upside of 8.39%. Given Accel Entertainment’s higher probable upside, analysts plainly believe Accel Entertainment is more favorable than Red Rock Resorts.

Profitability

This table compares Accel Entertainment and Red Rock Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Accel Entertainment	3.79%	25.70%	6.37%
Red Rock Resorts	9.21%	61.67%	4.51%

Insider and Institutional Ownership

55.4% of Accel Entertainment shares are owned by institutional investors. Comparatively, 47.8% of Red Rock Resorts shares are owned by institutional investors. 14.5% of Accel Entertainment shares are owned by insiders. Comparatively, 54.3% of Red Rock Resorts shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Red Rock Resorts beats Accel Entertainment on 11 of the 15 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 Red Rock Resorts

Red Rock Resorts, Inc., through its interest in Station Casinos LLC, develops and operates casino and entertainment properties in the United States. The company owns and operates gaming and entertainment facilities, including Durango Casino & Resort and smaller casinos in the Las Vegas regional market. The company was formerly known as Station Casinos Corp. and changed its name to Red Rock Resorts, Inc. in January 2016. Red Rock Resorts, Inc. was founded in 1976 and is based in Las Vegas, Nevada.