Analyzing Nintendo (OTCMKTS:NTDOY) and Boyd Gaming (NYSE:BYD)

Nintendo (OTCMKTS:NTDOY) and Boyd Gaming (NYSE:BYD) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of recent ratings and target prices for Nintendo and Boyd Gaming, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nintendo	1	4	2	1	2.38
Boyd Gaming	0	9	5	0	2.36

Boyd Gaming has a consensus price target of $92.08, indicating a potential upside of 14.06%. Given Boyd Gaming’s higher possible upside, analysts plainly believe Boyd Gaming is more favorable than Nintendo.

Volatility and Risk

Nintendo has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500. Comparatively, Boyd Gaming has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Insider and Institutional Ownership

0.0% of Nintendo shares are owned by institutional investors. Comparatively, 76.8% of Boyd Gaming shares are owned by institutional investors. 22.8% of Boyd Gaming shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Nintendo and Boyd Gaming”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nintendo	$15.37 billion	3.70	$2.82 billion	$0.60	18.40
Boyd Gaming	$4.09 billion	1.47	$1.84 billion	$22.81	3.54

Nintendo has higher revenue and earnings than Boyd Gaming. Boyd Gaming is trading at a lower price-to-earnings ratio than Nintendo, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Nintendo and Boyd Gaming’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nintendo	18.33%	13.82%	10.70%
Boyd Gaming	44.84%	25.63%	8.99%

Dividends

Nintendo pays an annual dividend of $0.08 per share and has a dividend yield of 0.7%. Boyd Gaming pays an annual dividend of $0.80 per share and has a dividend yield of 1.0%. Nintendo pays out 13.3% of its earnings in the form of a dividend. Boyd Gaming pays out 3.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Boyd Gaming has increased its dividend for 4 consecutive years. Boyd Gaming is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Boyd Gaming beats Nintendo on 11 of the 18 factors compared between the two stocks.

About Nintendo

Nintendo Co., Ltd., together with its subsidiaries, develops, manufactures, and sells home entertainment products in Japan, the Americas, Europe, and internationally. It also offers video game platforms, playing cards, Karuta, and other products; and handheld and home console hardware systems and related software. The company was formerly known as Nintendo Playing Card Co., Ltd. and changed its name to Nintendo Co., Ltd. in 1963. Nintendo Co., Ltd. was founded in 1889 and is headquartered in Kyoto, Japan.

About Boyd Gaming

Boyd Gaming Corporation, together with its subsidiaries, operates as a multi-jurisdictional gaming company in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania. The company operates through Las Vegas Locals, Downtown Las Vegas, Midwest & South, and Online segments. It also engages in owning and operating a travel agency. Boyd Gaming Corporation was founded in 1975 and is headquartered in Las Vegas, Nevada.