Contrasting RCI Hospitality (NASDAQ:RICK) & Monarch Casino & Resort (NASDAQ:MCRI)

RCI Hospitality (NASDAQ:RICK – Get Free Report) and Monarch Casino & Resort (NASDAQ:MCRI – Get Free Report) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.

Insider & Institutional Ownership

53.8% of RCI Hospitality shares are held by institutional investors. Comparatively, 62.4% of Monarch Casino & Resort shares are held by institutional investors. 11.4% of RCI Hospitality shares are held by company insiders. Comparatively, 26.3% of Monarch Casino & Resort shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for RCI Hospitality and Monarch Casino & Resort, as reported by MarketBeat.com.

Monarch Casino & Resort has a consensus target price of $124.40, indicating a potential upside of 5.38%. Given Monarch Casino & Resort’s stronger consensus rating and higher probable upside, analysts clearly believe Monarch Casino & Resort is more favorable than RCI Hospitality.

Profitability

This table compares RCI Hospitality and Monarch Casino & Resort’s net margins, return on equity and return on assets.

Dividends

RCI Hospitality pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Monarch Casino & Resort pays an annual dividend of $1.20 per share and has a dividend yield of 1.0%. RCI Hospitality pays out -78.0% of its earnings in the form of a dividend. Monarch Casino & Resort pays out 19.2% 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. RCI Hospitality has increased its dividend for 4 consecutive years. RCI Hospitality is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

RCI Hospitality has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Monarch Casino & Resort has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Earnings & Valuation

This table compares RCI Hospitality and Monarch Casino & Resort”s revenue, earnings per share (EPS) and valuation.

Monarch Casino & Resort has higher revenue and earnings than RCI Hospitality. RCI Hospitality is trading at a lower price-to-earnings ratio than Monarch Casino & Resort, indicating that it is currently the more affordable of the two stocks.

Summary

Monarch Casino & Resort beats RCI Hospitality on 15 of the 18 factors compared between the two stocks.

About RCI Hospitality

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RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company’s wholly-owned subsidiaries own and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. Wholly-owned subsidiaries also operate restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company founded in 1983 as Rick's Cabaret International, Inc., changed its name to RCI Hospitality Holdings, Inc. in August 2014, and is based in Houston, Texas.

About Monarch Casino & Resort

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Monarch Casino & Resort, Inc. engages in the ownership and operation of the Atlantis Casino Resort Spa, a hotel and casino facility in Reno, Nevada, and the Monarch Black Hawk Casino in Black Hawk, Colorado. The company was founded in 1993 and is headquartered in Reno, NV.