Capcom (OTCMKTS:CCOEY) versus Playtika (NASDAQ:PLTK) Critical Review

Capcom (OTCMKTS:CCOEY) and Playtika (NASDAQ:PLTK) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.

Dividends

Capcom pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. Playtika pays an annual dividend of $0.40 per share and has a dividend yield of 10.8%. Capcom pays out 22.7% of its earnings in the form of a dividend. Playtika pays out 166.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

Capcom has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Playtika has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Capcom and Playtika, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capcom	0	0	1	0	3.00
Playtika	0	5	3	0	2.38

Playtika has a consensus target price of $7.04, indicating a potential upside of 89.64%. Given Playtika’s higher possible upside, analysts clearly believe Playtika is more favorable than Capcom.

Valuation & Earnings

This table compares Capcom and Playtika”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capcom	$1.11 billion	13.08	$319.78 million	$0.44	31.07
Playtika	$2.55 billion	0.55	$162.20 million	$0.24	15.46

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

Insider and Institutional Ownership

11.9% of Playtika shares are owned by institutional investors. 5.1% of Playtika shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Capcom and Playtika’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capcom	30.10%	26.91%	20.87%
Playtika	3.23%	-83.90%	2.59%

Summary

Capcom beats Playtika on 9 of the 16 factors compared between the two stocks.

About Capcom

Capcom Co., Ltd. plans, develops, manufactures, sells, and distributes home video games, online games, mobile games, and arcade games in Japan and internationally. It operates through Digital Contents, Arcade Operations, Amusement Equipments, and Other Businesses segments. The Digital Contents segment develops and sells digital game content for consumer home video game platforms, as well as mobile content and PC online games. The Arcade Operations segment operates Plaza Capcom amusement facilities primarily in commercial complexes, as well as hosts various events. The Amusement Equipments segment is involved in the development, manufacture, and sale of software, frames and LCD devices for gaming machines. The Other Businesses segment engages in the adapting game content into movies, animated television programs, music CDs, and merchandise; and devoting resources to esports. Capcom Co., Ltd. was incorporated in 1979 and is headquartered in Osaka, Japan.

About Playtika

Playtika Holding Corp., together with its subsidiaries, develops mobile games in the United States, Europe, Middle East, Africa, Asia pacific, and internationally. The company owns a portfolio of casual and social casino-themed games. It distributes its games to the end customer through various web and mobile platforms and direct-to-consumer platforms. Playtika Holding Corp. was founded in 2010 and is headquartered in Herzliya Pituach, Israel. Playtika Holding Corp. is a subsidiary of Playtika Holding UK II Limited.