Head-To-Head Comparison: Scientific Games Corp (SGMS) & International Game Technology (IGT)

International Game Technology (NYSE: IGT) and Scientific Games Corp (NASDAQ:SGMS) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitabiliy and earnings.

Valuation and Earnings

This table compares International Game Technology and Scientific Games Corp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
International Game Technology $5.02 billion 0.74 $1.49 billion $1.23 14.98
Scientific Games Corp $2.93 billion 0.81 $861.00 million ($4.12) -6.49

International Game Technology has higher revenue and earnings than Scientific Games Corp. Scientific Games Corp is trading at a lower price-to-earnings ratio than International Game Technology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares International Game Technology and Scientific Games Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
International Game Technology 4.96% 11.97% 2.73%
Scientific Games Corp -12.38% N/A -4.19%

Volatility & Risk

International Game Technology has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Scientific Games Corp has a beta of 2.42, meaning that its stock price is 142% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for International Game Technology and Scientific Games Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
International Game Technology 0 3 1 0 2.25
Scientific Games Corp 0 4 1 0 2.20

International Game Technology presently has a consensus target price of $27.38, indicating a potential upside of 48.53%. Scientific Games Corp has a consensus target price of $18.75, indicating a potential downside of 29.91%. Given International Game Technology’s stronger consensus rating and higher probable upside, research analysts plainly believe International Game Technology is more favorable than Scientific Games Corp.

Insider & Institutional Ownership

39.8% of International Game Technology shares are held by institutional investors. Comparatively, 61.4% of Scientific Games Corp shares are held by institutional investors. 1.2% of International Game Technology shares are held by insiders. Comparatively, 41.5% of Scientific Games Corp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

International Game Technology pays an annual dividend of $0.80 per share and has a dividend yield of 4.3%. Scientific Games Corp does not pay a dividend. International Game Technology pays out 65.0% of its earnings in the form of a dividend. Scientific Games Corp has increased its dividend for 5 consecutive years.

Summary

International Game Technology beats Scientific Games Corp on 9 of the 15 factors compared between the two stocks.

International Game Technology Company Profile

International Game Technology (IGT) is a global gaming company specializing in the design, development, manufacture, and marketing of casino-style gaming equipment, systems technology, and game content across multiple platforms: land-based, online real-money and social gaming. The Company is a supplier of gaming entertainment products worldwide. IGT operates in two segments: North America and International. North America consists of the Company’s operations in the United States and Canada, which comprised 78% of the revenue during the fiscal year ended September 30, 2013 (fiscal 2013). International consists of its operations in all other jurisdictions worldwide, which consists of 22% of the consolidated revenues in fiscal 2013. The Company recognized revenues in three categories, which includes Gaming Operations, Product Sales and Interactive.

Scientific Games Corp Company Profile

Scientific Games Corporation is a developer of technology-based products and services and associated content for the gaming, lottery and interactive gaming industries. Its segments include Gaming, Lottery and Interactive. Its portfolio includes gaming machines and game content, casino management systems, table game products and services, instant and draw-based lottery games, server-based gaming and lottery systems, sports betting technology, lottery content and services, loyalty and rewards programs, interactive gaming and social casino solutions. Gaming segment designs, develops, manufactures, markets and distributes a portfolio of gaming products and services. Lottery segment consists of its systems-based services and product sales business and its instant games business. Its Interactive business segment includes social (non-wagering) gaming and interactive real-money gaming (RMG). Its games are available on Facebook, Amazon.com, the Apple app store and Android app on Google play.

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