Bally’s (NYSE:BALY – Get Free Report) and Darden Restaurants (NYSE:DRI – Get Free Report) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.
Risk & Volatility
Bally’s has a beta of 1.83, meaning that its share price is 83% more volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings for Bally’s and Darden Restaurants, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bally’s | 2 | 3 | 0 | 0 | 1.60 |
| Darden Restaurants | 0 | 9 | 16 | 0 | 2.64 |
Bally’s currently has a consensus target price of $11.75, indicating a potential downside of 9.89%. Darden Restaurants has a consensus target price of $232.82, indicating a potential upside of 6.14%. Given Darden Restaurants’ stronger consensus rating and higher possible upside, analysts clearly believe Darden Restaurants is more favorable than Bally’s.
Profitability
This table compares Bally’s and Darden Restaurants’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bally’s | -25.83% | -40.97% | -7.66% |
| Darden Restaurants | 8.85% | 58.64% | 9.56% |
Institutional & Insider Ownership
70.4% of Bally’s shares are held by institutional investors. Comparatively, 93.6% of Darden Restaurants shares are held by institutional investors. 69.3% of Bally’s shares are held by company insiders. Comparatively, 0.7% of Darden Restaurants shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Bally’s and Darden Restaurants”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bally’s | $2.66 billion | 0.25 | -$701.10 million | ($6.80) | -1.92 |
| Darden Restaurants | $13.21 billion | 1.88 | $1.21 billion | $10.23 | 21.44 |
Darden Restaurants has higher revenue and earnings than Bally’s. Bally’s is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.
Summary
Darden Restaurants beats Bally’s on 12 of the 14 factors compared between the two stocks.
About Bally’s
Bally’s Corp. is a global casino-entertainment company with a portfolio of casinos and resorts and online gaming businesses. It operates through the following segments: Casinos & Resorts, International Interactive, and North America Interactive. The Casinos & Resorts segment consists of the company’s casino and resort properties, a horse racetrack, and a golf course. The International Interactive segment includes the European and Asian operations of Gamesys, a business-to-consumer iCasino operator. The North America Interactive segment covers a portfolio of sports betting, iGaming, and free-to-play gaming brands such as Bally’s Interactive, SportCaller, and Live at the Bike, and the North American operations of Gamesys. The company was founded on March 1, 2004 and is headquartered in Providence, RI.
About Darden Restaurants
Darden Restaurants, Inc., together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s Prime Seafood, and Capital Burger brand names. Darden Restaurants, Inc. was incorporated in 1995 and is based in Orlando, Florida.
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