Critical Comparison: Six Flags (SIX) & Vail Resorts (MTN)

Six Flags (NYSE: SIX) and Vail Resorts (NYSE:MTN) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Institutional and Insider Ownership

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97.4% of Six Flags shares are owned by institutional investors. Comparatively, 95.8% of Vail Resorts shares are owned by institutional investors. 6.9% of Six Flags shares are owned by insiders. Comparatively, 3.3% of Vail Resorts shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Six Flags pays an annual dividend of $3.12 per share and has a dividend yield of 5.0%. Vail Resorts pays an annual dividend of $5.88 per share and has a dividend yield of 2.6%. Six Flags pays out 146.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vail Resorts pays out 112.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Six Flags has increased its dividend for 8 consecutive years and Vail Resorts has increased its dividend for 7 consecutive years. Six Flags is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Six Flags and Vail Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Six Flags 20.15% -41.55% 7.58%
Vail Resorts 16.91% 13.17% 5.72%

Earnings & Valuation

This table compares Six Flags and Vail Resorts’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Six Flags $1.36 billion 3.87 $273.81 million $2.13 29.18
Vail Resorts $1.91 billion 4.74 $210.55 million $5.22 42.89

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

Risk & Volatility

Six Flags has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Vail Resorts has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Six Flags and Vail Resorts, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Six Flags 1 1 9 0 2.73
Vail Resorts 0 1 8 0 2.89

Six Flags presently has a consensus target price of $68.11, indicating a potential upside of 9.57%. Vail Resorts has a consensus target price of $249.00, indicating a potential upside of 11.23%. Given Vail Resorts’ stronger consensus rating and higher probable upside, analysts clearly believe Vail Resorts is more favorable than Six Flags.

Summary

Six Flags beats Vail Resorts on 9 of the 17 factors compared between the two stocks.

About Six Flags

Six Flags Entertainment Corporation owns and operates regional theme and water parks under the Six Flags brand name. The company's parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. It owns and operates 20 parks, including 17 parks in the United States; 2 parks in Mexico; and 1 park in Montreal, Canada. The company was formerly known as Six Flags, Inc. and changed its name to Six Flags Entertainment Corporation in April 2010. Six Flags Entertainment Corporation was founded in 1961 and is based in Grand Prairie, Texas.

About Vail Resorts

Vail Resorts, Inc., through its subsidiaries, operates mountain resorts and urban ski areas in the United States. The company operates through three segments: Mountain, Lodging, and Real Estate. The Mountain segment operates 11 mountain resorts, including Vail, Beaver Creek, Breckenridge, and Keystone resorts in Colorado; Park City Mountain resort in Utah; Heavenly, Northstar, and Kirkwood in the Lake Tahoe area of California and Nevada; Whistler Blackcomb in Canada; Stowe Mountain resort in Northern Vermont; and Perisher in Australia, as well as three urban ski areas, such as Wilmot Mountain in Wisconsin, Afton Alps in Minnesota, and Mount Brighton in Michigan. Its resorts offer various winter and summer recreational activities, including skiing, snowboarding, snowshoeing, snowtubing, sightseeing, mountain biking, guided hiking, zip lines, challenge ropes courses, alpine slides and mountain coasters, children's activities, and other recreational activities; and ski and snowboard lessons, equipment rental and retail merchandise services, dining venues, private club operations, and other winter and summer recreational activities. This segment also leases its owned and leased commercial space to third party operators; and provides real estate brokerage services. The Lodging segment owns and/or manages various luxury hotels and condominiums under the RockResorts brand, and other lodging properties; various condominiums located in proximity to the company's mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates approximately 4,700 owned and managed hotel and condominium units. The Real Estate segment owns, develops, and sells real estate properties in and around the company's resort communities. Vail Resorts, Inc. was founded in 1997 and is based in Broomfield, Colorado.

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