Reviewing Six Flags Entertainment (NYSE:FUN) and Churchill Downs (NASDAQ:CHDN)

Churchill Downs (NASDAQ:CHDN) and Six Flags Entertainment (NYSE:FUN) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Profitability

This table compares Churchill Downs and Six Flags Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Churchill Downs	13.82%	42.16%	6.31%
Six Flags Entertainment	-57.25%	7.43%	0.38%

Institutional and Insider Ownership

82.6% of Churchill Downs shares are held by institutional investors. Comparatively, 64.7% of Six Flags Entertainment shares are held by institutional investors. 5.9% of Churchill Downs shares are held by insiders. Comparatively, 2.1% of Six Flags Entertainment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Churchill Downs has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Six Flags Entertainment has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Churchill Downs and Six Flags Entertainment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Churchill Downs	0	1	10	0	2.91
Six Flags Entertainment	3	6	7	0	2.25

Churchill Downs presently has a consensus price target of $134.89, indicating a potential upside of 69.10%. Six Flags Entertainment has a consensus price target of $21.50, indicating a potential upside of 74.26%. Given Six Flags Entertainment’s higher probable upside, analysts clearly believe Six Flags Entertainment is more favorable than Churchill Downs.

Valuation and Earnings

This table compares Churchill Downs and Six Flags Entertainment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Churchill Downs	$2.93 billion	1.90	$383.00 million	$5.83	13.68
Six Flags Entertainment	$3.10 billion	0.41	-$1.60 billion	($17.32)	-0.71

Churchill Downs has higher earnings, but lower revenue than Six Flags Entertainment. Six Flags Entertainment is trading at a lower price-to-earnings ratio than Churchill Downs, indicating that it is currently the more affordable of the two stocks.

Summary

Churchill Downs beats Six Flags Entertainment on 12 of the 14 factors compared between the two stocks.

About Churchill Downs

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. The company operates pari-mutuel gaming entertainment venues; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; retail sports books; casino gaming; and Terre Haute Casino Resort. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.

About Six Flags Entertainment

Cedar Fair, L.P. owns and operates amusement and water parks, as well as complementary resort facilities. Its amusement parks include Cedar Point located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott's Berry Farm near Los Angeles, California; Canada's Wonderland near Toronto, Ontario; Kings Island near Cincinnati, Ohio; Carowinds in Charlotte, North Carolina; Kings Dominion situated near Richmond, Virginia; California's Great America located in Santa Clara, California; Dorney Park in Pennsylvania; Worlds of Fun located in Kansas City, Missouri; Valleyfair situated near Minneapolis/St. Paul, Minnesota; Michigan's Adventure situated near Muskegon, Michigan; Schlitterbahn Waterpark & Resort New Braunfels in New Braunfels, Texas; and Schlitterbahn Waterpark Galveston in Galveston, Texas. The company also owns and operates the Castaway Bay Indoor Waterpark Resort, Hotel Breakers, Cedar Point's Express Hotel, and Sawmill Creek Resort. Cedar Fair, L.P. was founded in 1983 and is based in Sandusky, Ohio.