From Nasdaq:

MGM Resorts stock is a better pick than Western Digital stock for the next three years due to its better prospects. Although both companies have a similar market capitalization and revenue base, MGM has seen stronger gains, with a 50% increase compared to WDC’s slight change. The sections below will compare a range of factors to determine how these stocks may perform in the next three years.

With respect to the index, WDC stock performance has been volatile, with unreliable returns over the past three years, while MGM stock’s returns have been inconsistent. While some individual stocks have struggled to consistently beat the S&P 500, the Trefis High Quality (HQ) Portfolio, including 30 stocks, has outperformed the S&P 500 each year over the same period.

Looking at prospects for the next three years, MGM is expected to fare better due to its better revenue growth, profitability, and financial position. With high single-digit average sales growth anticipated for both WDC and MGM, the latter is expected to perform better between the two.

MGM’s revenue growth has been better, with an average annual growth rate of 21.1% in the last three years, compared to -7.4% for Western Digital. Additionally, MGM has been profitable, with an operating margin of 0.3% compared to -18% for Western Digital in the last twelve-month period. MGM also has a better debt position.

Based on current valuation multiples and historical averages, MGM stock appears to trade at more favorable metrics compared to WDC stock, thus suggesting better returns in the next three years.

Trefis reinforced value portfolio data indicates that WDC has underperformed the S&P 500 significantly from January 2024 to date. Meanwhile, MGM has seen a 53% total return from 2017 to 2024, outperforming WDC.



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