Churchill Downs (NASDAQ: CHDN) and Speedway Motorsports (NYSE:TRK) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.
Churchill Downs pays an annual dividend of $1.52 per share and has a dividend yield of 0.5%. Speedway Motorsports pays an annual dividend of $0.60 per share and has a dividend yield of 3.4%. Churchill Downs pays out 25.9% of its earnings in the form of a dividend. Speedway Motorsports pays out 65.9% 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.
Volatility and Risk
Churchill Downs has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Speedway Motorsports has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.
Earnings and Valuation
This table compares Churchill Downs and Speedway Motorsports’ top-line revenue, earnings per share and valuation.
Speedway Motorsports has lower revenue, but higher earnings than Churchill Downs. Speedway Motorsports is trading at a lower price-to-earnings ratio than Churchill Downs, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
83.4% of Churchill Downs shares are owned by institutional investors. Comparatively, 23.3% of Speedway Motorsports shares are owned by institutional investors. 13.8% of Churchill Downs shares are owned by insiders. Comparatively, 72.3% of Speedway Motorsports shares are owned by 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.
This table compares Churchill Downs and Speedway Motorsports’ net margins, return on equity and return on assets.
This is a summary of current ratings and price targets for Churchill Downs and Speedway Motorsports, as provided by MarketBeat.
Churchill Downs presently has a consensus price target of $253.00, indicating a potential downside of 9.27%. Given Churchill Downs’ higher probable upside, equities research analysts clearly believe Churchill Downs is more favorable than Speedway Motorsports.
Churchill Downs beats Speedway Motorsports on 10 of the 15 factors compared between the two stocks.
About Churchill Downs
Churchill Downs Incorporated operates as a racing, gaming, and online entertainment company in the United States. It operates through Racing, Casinos, TwinSpires, and Other Investments segments. The company operates 4 racetracks, including Churchill Downs Racetrack in Louisville, Kentucky; Arlington International Race Course in Arlington Heights with 11 off-track betting (OTB) facilities in Illinois; Fair Grounds Race Course in New Orleans along with 12 OTBs in Louisiana; and Calder Race Course in Miami Gardens, Florida. It also operates five casinos, which provides brick-and-mortar real-money casino gaming services with approximately 10,000 gaming positions; and operates 3 hotels. In addition, the company through TwinSpires.com operates mobile and online wagering business; and a platform for betting on horseracing, as well as offers streaming video of live horse races, replays, and an assortment of racing information. Further, it offers reports, statistical information, handicapping information, pedigrees, and other data for the thoroughbred horse industry through Brisnet.com and TwinSpires.com. Additionally, the company manufactures and operates pari-mutuel wagering systems for racetracks, OTBs, and other pari-mutuel wagering businesses; and provides totalisator and Internet-based interactive gaming services. Churchill Downs Incorporated was founded in 1928 and is headquartered in Louisville, Kentucky.
About Speedway Motorsports
Speedway Motorsports, Inc., through its subsidiaries, promotes, markets, and sponsors motorsports activities in the United States. The company owns and operates eight racing facilities, including Atlanta Motor Speedway, Bristol Motor Speedway, Charlotte Motor Speedway, Kentucky Speedway, Las Vegas Motor Speedway, New Hampshire Motor Speedway, Sonoma Raceway, and Texas Motor Speedway racing facilities. As of December 31, 2017, its racing facilities included total seating capacity of approximately 715,000 with 754 luxury suites. The company also provides souvenir merchandising, including screen-printing and embroidery, as well as food, beverage, and hospitality catering services; and radio programming, production, and distribution services. In addition, it manufactures and distributes modified racing cars and parts; produces and sells micro-lubricant; distributes, wholesales, and retails motorsports and other sports-related souvenir merchandise and apparel; leases oil and gas mineral rights; and rents office, warehouse, and industrial park space, as well as track rentals for motorsports and non-motorsports events and activities, and driving schools. The company was founded in 1959 and is headquartered in Concord, North Carolina. Speedway Motorsports Inc. is a subsidiary of Sonic Financial Corporation.