Take-Two Interactive Software, Inc. (TTWO), Electronic Arts Inc. (EA): Why Gaming Stocks Are Looking Better

Since this is a slightly more capital intensive business, International Game Technology has a debt gearing of 1.47. This is a bit on the higher side, but the company generates enough profit to service interest outgo. In fact, its profit margin improved to 13% in the latest quarter, up from 11.6% last year. At a current price of $17.3, the stock trades at a forward price earnings ratio of 12.7 and offers a dividend yield of nearly 2%. Deutsche Bank has a buy call on the stock with a target price of $20.

Foolish bottom line

Overall, first-quarter results of these gaming stocks allude to better times ahead. While these are tough times for console gaming companies, especially Electronic Arts Inc. (NASDAQ:EA), old economy stocks such as International Game Technology offer a safer option to investors.

The article Why Gaming Stocks Are Looking Better originally appeared on Fool.com and is written by Jacob Wolinsky.

Jacob Wolinsky has no position in any stocks mentioned. The Motley Fool recommends Take-Two Interactive. Jacob is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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