Financial Analysis: Playa Hotels & Resorts (PLYA) versus Caesars Entertainment Co. Common Stock (CZR)

Playa Hotels & Resorts (NASDAQ: PLYA) and Caesars Entertainment Co. Common Stock (NASDAQ:CZR) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Playa Hotels & Resorts and Caesars Entertainment Co. Common Stock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Playa Hotels & Resorts -1.08% 6.46% 2.27%
Caesars Entertainment Co. Common Stock 0.97% N/A -0.67%

Analyst Ratings

This is a summary of recent recommendations for Playa Hotels & Resorts and Caesars Entertainment Co. Common Stock, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Playa Hotels & Resorts 0 0 3 0 3.00
Caesars Entertainment Co. Common Stock 0 3 5 0 2.63

Playa Hotels & Resorts presently has a consensus price target of $14.92, suggesting a potential upside of 38.12%. Caesars Entertainment Co. Common Stock has a consensus price target of $15.06, suggesting a potential upside of 30.19%. Given Playa Hotels & Resorts’ stronger consensus rating and higher probable upside, equities analysts plainly believe Playa Hotels & Resorts is more favorable than Caesars Entertainment Co. Common Stock.

Valuation & Earnings

This table compares Playa Hotels & Resorts and Caesars Entertainment Co. Common Stock’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Playa Hotels & Resorts $559.54 million 2.13 -$240,000.00 $0.38 28.42
Caesars Entertainment Co. Common Stock $4.85 billion 1.66 -$375.00 million ($3.37) -3.43

Playa Hotels & Resorts has higher earnings, but lower revenue than Caesars Entertainment Co. Common Stock. Caesars Entertainment Co. Common Stock is trading at a lower price-to-earnings ratio than Playa Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

83.3% of Playa Hotels & Resorts shares are held by institutional investors. 3.7% of Playa Hotels & Resorts shares are held by insiders. Comparatively, 0.9% of Caesars Entertainment Co. Common Stock shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Playa Hotels & Resorts has a beta of -0.02, indicating that its stock price is 102% less volatile than the S&P 500. Comparatively, Caesars Entertainment Co. Common Stock has a beta of 0.35, indicating that its stock price is 65% less volatile than the S&P 500.

Summary

Playa Hotels & Resorts beats Caesars Entertainment Co. Common Stock on 10 of the 14 factors compared between the two stocks.

Playa Hotels & Resorts Company Profile

Playa Hotels & Resorts N.V. owns, operates, develops, and manages all-inclusive resorts in prime beachfront locations in various vacation destinations in Mexico and the Caribbean. The company owns, operates, and manages resorts under the Hyatt Ziva, Panama Jack, Dreams, Sanctuary, Hyatt Zilara, THE Royal, and Secrets brand names. As of December 31, 2017, it owned a portfolio consisting of 13 resorts comprising 6,130 rooms located in Mexico, the Dominican Republic, and Jamaica. Playa Hotels & Resorts N.V. is headquartered in Fairfax, Virginia.

Caesars Entertainment Co. Common Stock Company Profile

Caesars Entertainment Corporation, through its subsidiaries, provides casino-entertainment and hospitality services in the United States and internationally. The company operates 36,000 slot machines and 2,700 table games, as well as other games comprising keno, poker, and race and sports books; and buffets, restaurants, bars, nightclubs, and lounges located throughout its casinos, as well as banquets and room service. As of March 7, 2018, it owned and operated 47 casinos. It also provides various retail and entertainment offerings in its casinos, as well as The LINQ promenade, an open-air dining, entertainment, and retail development; and operates various entertainment venues, including the Colosseum at Caesars Palace and Zappos Theater at Planet Hollywood. In addition, the company operates online gaming business that provides real money games; and owns the World Series of Poker tournaments and brand. The company was formerly known as Harrah's Entertainment Inc. and changed its name to Caesars Entertainment Corporation in November 2010. Caesars Entertainment Corporation was founded in 1937 and is based in Las Vegas, Nevada.

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