International Speedway Corporation (NASDAQ: ISCA) and Speedway Motorsports (NYSE:TRK) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.
Insider & Institutional Ownership
51.2% of International Speedway Corporation shares are held by institutional investors. Comparatively, 21.7% of Speedway Motorsports shares are held by institutional investors. 43.1% of International Speedway Corporation shares are held by insiders. Comparatively, 72.0% of Speedway Motorsports shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares International Speedway Corporation and Speedway Motorsports’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|International Speedway Corporation||$664.05 million||2.35||$215.71 million||$1.53||22.78|
|Speedway Motorsports||$512.87 million||1.67||$130.33 million||$0.96||21.79|
International Speedway Corporation has higher revenue and earnings than Speedway Motorsports. Speedway Motorsports is trading at a lower price-to-earnings ratio than International Speedway Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for International Speedway Corporation and Speedway Motorsports, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|International Speedway Corporation||1||2||0||0||1.67|
International Speedway Corporation presently has a consensus target price of $36.00, suggesting a potential upside of 3.30%. Given International Speedway Corporation’s higher probable upside, analysts clearly believe International Speedway Corporation is more favorable than Speedway Motorsports.
This table compares International Speedway Corporation and Speedway Motorsports’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|International Speedway Corporation||10.41%||4.94%||3.13%|
Volatility and Risk
International Speedway Corporation has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Speedway Motorsports has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.
International Speedway Corporation pays an annual dividend of $0.43 per share and has a dividend yield of 1.2%. Speedway Motorsports pays an annual dividend of $0.60 per share and has a dividend yield of 2.9%. International Speedway Corporation pays out 28.1% of its earnings in the form of a dividend. Speedway Motorsports pays out 62.5% 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. International Speedway Corporation has increased its dividend for 11 consecutive years.
International Speedway Corporation beats Speedway Motorsports on 12 of the 16 factors compared between the two stocks.
About International Speedway Corporation
International Speedway Corporation is an owner of motorsports entertainment facilities and promoter of motorsports themed entertainment activities in the United States. The Company’s motorsports themed event operations consist of racing events at its motorsports entertainment facilities. As of November 30, 2016, the Company owned and/or operated 13 of the nation’s motorsports entertainment facilities: Daytona International Speedway in Florida; Talladega Superspeedway in Alabama; Michigan International Speedway in Michigan; Auto Club Speedway of Southern California in California; Kansas Speedway in Kansas; Richmond International Raceway in Virginia; Darlington Raceway in South Carolina; Chicagoland Speedway in Illinois; Martinsville Speedway in Virginia; Phoenix International Raceway in Arizona; Homestead-Miami Speedway in Florida; Watkins Glen International in New York, and Route 66 Raceway in Illinois.
About Speedway Motorsports
Speedway Motorsports, Inc. (SMI), through its operating subsidiaries, is a promoter, marketer and sponsor of motorsports activities in the United States. The Company’s operations consist of promoting, marketing and sponsoring motorsports racing events, merchandising and other related activities conducted at its various speedway facilities located in the United States. Its segments include motorsports event related and all other. Its motorsports event related segment consists of National Association for Stock Car Auto Racing, Inc. (NASCAR) broadcasting and event motorsports merchandising activities. Its all other operations consist of SMIP subsidiary non-event motorsports and non-motorsports merchandising, US Legend Cars International subsidiary (Legend Cars) non-event merchandising and sanctioning body activities, Oil-Chem micro-lubricant activities, Texas Motor Speedway (TMS) natural gas mineral rights lease and related revenues, and office rentals at certain Company speedways.
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