The casino sector, which focuses on leisure and resort assets and casino gaming activities, is a part of the larger gaming business. Businesses in the industry own and run racetracks, resorts, hotels, ski areas, and casinos all over the world and they are also engaged in online gambling are also included in this industry. Best casino stocks include Wynn Resorts Ltd., MGM Resorts International, and Las Vegas Sands Corp.
Kaleem KirkpatrickSep 13, 202233 Shares874 Views
The casino sector, which focuses on leisure and resort assets and casino gaming activities, is a part of the larger gaming business.
Businesses in the industry own and run racetracks, resorts, hotels, ski areas, and casinos all over the world and they are also engaged in online gambling are also included in this industry. Best casino stocksinclude Wynn Resorts Ltd., MGM Resorts International, and Las Vegas Sands Corp.
Numerous enterprises operating in the gaming industry have suffered as a result of the COVID-19 outbreak and related regulations. Nevertheless, as constraints have been loosened, the industry is beginning to recover. With a record $5.3 billion in revenue for the month of March, U.S. casinos experienced their best month ever. Additionally, first-quarter revenue reached a new high of $14.3 billion.
Inflation hasn't been good for many of the best casino stocks to purchase right now, if you're looking for them. About 400 basis points lower than the S&P 500, the VanEck Gaming ETF is down more than 23% in 2022.
Despite casino stocks suffering losses in the second quarter, CNBC reported in mid-June that American casinos brought in $4.99 billion in April, the highest April total in the history of the sector. In terms of revenue, it was second only to March 2022 in all time.
These casino stocks have the lowest price-to-earnings (P/E) ratio during the previous 12 months. Because dividends and share buybacks are two ways that earnings can be distributed to shareholders, a low P/E ratio indicates that you are paying less for each dollar of profit made.
One of the most spectacular portfolios of properties in the casino sector belongs to MGM. The Bellagio, MGM Grand, The Mirage, Luxor, and New York-New York are just a few of the well-known casino resorts it owns. It also has properties in Atlantic City, Detroit, and Mississippi. Additionally, it owns 56% of each of the MGM Macau and MGM Cotai casinos in Macau.
In comparison to many of its competitors, it is more vulnerable to Las Vegas tourism because almost two-thirds of its 45,000 hotel rooms are on the strip.
When the pandemic initially hit in March 2020, MGM's stock crashed, but thanks to an investment from IAC/Interactive and a shift to internet gaming via BetMGM, it has since recovered to post-financial crisis highs.
It opened sportsbooks at a number of its locations in 2021 and began offering online betting in a number of states. Adjusted EBITDA is already higher than pre-pandemic levels as of the third quarter of 2021, creating momentum for the post-pandemic era.
The company also offers a variety of retail options, dining establishments, nightlife, and theatrical entertainment. Midway through May, MGM said that it had successfully acquired The Cosmopolitan of Las Vegas from Blackstone for $1.6 billion. Over 3,000 rooms and a 110,000-square-foot casino are on the property.
With a portfolio of gaming assets, including casinos and dispersed gaming operations, Golden Entertainment is a diverse gaming corporation. It runs gaming machines in a variety of establishments, including bars and pubs, and it owns casinos and taverns.
Early in May, the company released its financial results for Q1 of its 2022 fiscal year (FY), which covered the three months that concluded on March 31, 2022. On the back of 14.2% yearly revenue growth, net income increased by 239.6%. (YOY).
In comparison to the same quarter last year, Golden Entertainment's non-operating expenses were lower, and the income tax benefit it obtained was significantly bigger. These factors helped to increase net income.
The best place to place your wagers in Macau is at Las Vegas Sands. With five casinos in Macau and the Marina Bay Sands in Singapore, the corporation is solely focused on the Asian market. In March 2021, it paid $6.25 billion to sell its Las Vegas operations, which included the Venetian, to a private equity company.
Unfortunately, the pandemic strategy of concentrating on Asia backfired as traffic to Macau plummeted as a result of stringent lockdowns in China and other Asian nations. The stock's 2021 close was far below its pre-pandemic levels.
Due to its closeness to sizable populations and the cultural affinity for gaming in China and other areas of Asia, Macau should continue to be the largest gaming market in the world as the region recovers from the pandemic.
Las Vegas Sands has been slower to enter the online gambling business due to its focus on the global market, but it announced ambitions to become a strategic investor in digital gaming technologies in July 2021. The corporation does not, however, currently operate an online gambling business.
Another diversified casino operator is Wynn, which owns 72% of the Wynn Palace and Wynn Macau in Macau, the Wynn, and Encore in Las Vegas, as well as the 2019-opened Encore Boston Harbor.
In October 2020, the business also introduced Wynn Interactive, in which it holds a 72% share, and collaborated with BetBull to build an online sportsbook and an online casino. Last year, Wynn came close to selling Wynn Interactive to a SPAC, but ultimately decided against it in November 2021.
According to media reports from January 2022, the company was once more looking for a buyer. The economics of online sports betting are unfavorable, according to former CEO Matt Maddox, because rivals are spending too much on acquisition costs.
Wynn is still dealing with the effects of the pandemic. As of the third quarter of 2021, the business was still losing money, but it continued to pursue the development of substantial luxury residences and recently unveiled plans for a resort to be built close to Dubai in 2026. Future investors may benefit from Wynn's attention on neglected locations like Dubai and the Boston region.
On this list, DraftKings is the only pure-play online gambling business. It went public through a SPAC in 2020. Together with FanDuel, it essentially controls the online sports betting market. As of September 2021, DraftKings maintained a 29% market share in the three top states for online sports betting - New Jersey, Pennsylvania, and Michigan - while FanDuel claimed 40%.
Like many of its rivals, DraftKings has grown through acquisitions. It spent $1.5 billion in August 2021 to acquire Golden Nugget Online Gaming, boosting its dominance in online casino games and extending its reach beyond daily fantasy sports and sports betting.
Online sports betting and gambling boomed as a result of social withdrawal and stay-at-home orders during the epidemic, and DraftKings' income nearly doubled in 2020 to $614.5 million. It had anticipated close to 50% top-line growth in 2022, indicating excellent momentum, and was on course for sales to double once more in 2021.
During the third quarter of 2021, the company attained 1.3 million paying subscribers on a monthly basis. Even though it's currently not profitable at all, DraftKings has a lot of potential for expansion in the gaming sector.
These are the best casino stocks according to a growth model that weights a company's most recent quarterly YOY earnings-per-share (EPS) growth and quarterly YOY percentage revenue growth equally.
The success of a corporation depends on both sales and profits. Due to this, evaluating businesses based on just one growth indicator leaves rankings open to accounting irregularities of the quarter (such as changes in tax law or restructuring charges), which could render one or both figures unrepresentative of the business as a whole.
As outliers, businesses with quarterly EPS or revenue growth of greater than 2,500% were disqualified.
The business reported its financial results for the first quarter (Q1) of its fiscal year (FY), which ended on March 31, 2022, at the beginning of May. Net income increased by 239.6% as a result of a 14.2% yearly rise in revenue. (YOY).
Hilton Grand Vacations is a large international timeshare company. The business creates and manages a network of luxury vacation ownership resorts in a variety of vacation spots, including Las Vegas.
A remarkable improvement from the net loss of $7 million in the same quarter last year, Hilton Grand Vacations posted a net income of $51 million. Revenue increased by YOY 231.5%. An EPS growth rate could not be determined for the table above since the company's EPS changed from negative in the prior quarter to positive in the most recent quarter.
Two hotels and casinos are owned and run by Monarch Casino & Resort, one in Black Hawk, Colorado, and the other in Reno, Nevada. Additionally, it owns other pieces of property, a commercial warehouse, and a dining establishment.
A Dutch firm called Playa Hotels & Resorts owns, manages, and builds all-inclusive resorts all across Mexico and the Caribbean. Accommodations, meals, entertainment, and other hospitality services are provided.
Financial data for the first quarter of the fiscal year 2022, which concluded on March 31, were released by the corporation in early May. In contrast to the net loss of $69.7 million reported in the same quarter last year, Playa Hotels & Resorts generated a net gain of $42.7 million this quarter. Revenue increased 182.4% YoY.
Top 4 Casino Stocks for Investors (in September 2021)
Yes, you can invest in a casino. Casino stocks are categorized as consumer discretionary stocks because of the strong correlation between gaming and tourism spending and the state of the economy as a whole.
Over the past ten years, the casino industry as a whole has underperformed in the market, but there have been notable exceptions, such as Caesars and internet gambling companies like DraftKings.
The next ten years will probably be very different from the last ten because of the growth of online gambling in the United States, and the reopening of casinos after a pandemic could result in a spike in traffic. Even though the industry still faces a lot of uncertainty, risk-tolerant investors may discover a significant reward waiting in the casino sector.