Kalkine Media explores five US casino stocks to watch in October
The casino sector comprises firms from the gaming industry that offer leisure and other related services through their resorts and casino gaming properties. To name some, Las Vegas Sands Corp. (NYSE: LVS), Wynn Resorts, Limited (NASDAQ: WYNN), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), and Boyd Gaming Corporation (NYSE: BYD), are among the prominent players in this segment.
Meanwhile, the casino segment was one of the worst-hit sectors during the COVID-19 pandemic, as consumers were forced to stay home due to lockdown regulations. However, they gained some traction after public health restrictions were eased.
However, given the recent global market turmoil, including the inflationary pressures, rising interest rates, and geopolitical turmoil, the sector was hurt again, as the consumers seemed to be pulling back their spending.
But, the stocks noted gains on September 21, making them the exception in the session while the majority of stocks retreated. Some analysts believe that easing coronavirus-led restrictions in Macau, China, may help the tourism sector in improving. Notably, Macau is one of the major gambling hubs in Asia.
The Hong Kong government said it would end the hotel quarantine for foreign visitors, but no specific date has been announced. Subsequently, the government said it plans to reopen, despite registering new coronavirus cases in Hong Kong.
So Kalkine Media® takes a look at the recent stock performance and other details about the companies:
Las Vegas Sands Corp. (NYSE: LVS)
Las Vegas Sands Corp is a leading integrated resorts and casino company with a price-to-earnings (P/E) ratio of 16.32. The US$ 28.47 billion market cap company offers consumers gambling, accommodation, and other leisure services.
The LVS stock fell about one per cent YTD while jumping near 11 per cent QTD and four per cent YoY. The stock of the casino firm touched its 52-week low of US$ 28.875 on May 12, 2022.
The company had recently been in the news after it announced on September 14 the submission of Sand China's application for a fresh 10-year gaming concession in Macao. This submission indicates the interests of Sands China in Macao.
Las Vegas Sands Corp. incurred a net loss of US$ 290 million on revenue of US$ 1.04 billion in the fiscal 2022 second quarter. The Las Vegas, Nevada-based casino firm's net loss was US$ 192 million on revenue of US$ 1.17 billion in the year-ago quarter.
Wynn Resorts, Limited (NASDAQ: WYNN)
Wynn Resorts is a leading resort company with a market cap of US$ 7.47 billion. The firm operates high-end hotels and casinos in various locations.
The WYNN stock plummeted more than 22 per cent in 2022 while slipping about 16 per cent year-over-year. However, in the third quarter, it shot up more than 15 per cent through September 21.
Wynn Resorts' revenue decreased to US$ 908.83 million in Q2 FY22, from US$ 990.11 million in the same quarter of the previous year. The majority of the revenue, about US$ 359.58 million, came from its casino segment in the latest quarter.
The Nevada-based casino and resort firm noted a loss of US$ 130.05 million in Q2 FY22, down from a loss of US$ 131.36 million in Q2 FY21.
MGM Resorts International (NYSE: MGM)
MGM Resorts is a hospitality and entertainment company with a dividend yield of 0.03 per cent. The company, which operates resorts and casinos in various locations, had a P/E ratio of 4.74.
The MGM stock slumped about 25 per cent in the running year while losing more than 16 per cent YoY. The stock of the hospitality firm added about 13 per cent in the third quarter through September 21.
On September 1, the company said that its BetMGM had launched its mobile application in Kansas, through which the consumers could access a range of betting options and opportunities for earning experiences at the company's premier destinations across the country.
During its latest quarter earnings release, the company repurchased about US$ 1.1 billion or eight per cent of outstanding shares in the second quarter.
MGM Resorts International's revenue increased by 44 per cent YoY to US$ 3.3 billion in Q2 FY22, from US$ 2.3 billion in the year-ago period. Its revenue from the casino segment was US$ 1.35 billion.
The Las Vegas, Nevada-based hospitality firm had US$ 1.78 billion as its net income in Q2 FY22, against US$ 104.75 million in Q2 FY21.
Caesars Entertainment, Inc. (NASDAQ: CZR)
Caesars Entertainment is a hotel and casino operating firm with a market cap of US$ 9.44 billion. The entertainment company's stock was down about 52 per cent YTD and 58 per cent YoY. However, on a QTD basis, the CZR stock added about 15 per cent.
The GAAP net revenue of Caesars Entertainment was US$ 2.8 billion in Q2 FY22, up from US$ 2.5 billion in the year-ago quarter. The casino and hotel company incurred a net loss of US$ 123 million in the fiscal 2022 second quarter, against an income of US$ 71 million in the previous year's quarter.
Boyd Gaming Corporation (NYSE: BYD)
Boyd Gaming is a hospitality and entertainment company with a dividend yield of 1.14 per cent. The hotel, casinos, and restaurant operating firm had a P/E ratio o 10.54.
The US$ 5.59 billion market cap stock dropped by around 20 per cent YTD and 13 per cent YoY. In the running quarter, the BYD stock added about five per cent through September 21.
The casino company's board announced a quarterly cash dividend of US$ 0.15 apiece on September 15, payable on October 15, 2022.
Boyd's revenue was slightly up to US$ 894.5 million, from US$ 893.6 million in the year-ago period. The Nevada-based company's Q2 FY22 net income was US$ 146.8 million, against US$ 113.7 million in Q2 FY21.
While the sector was hurt due to several macroeconomic headwinds, some experts anticipate that the sector may regain momentum in the coming. While it cannot be predicted how long inflation will stay at a higher level, it is seen that the global central banks are taking aggressive measures to fight it. The US Federal Reserve officials announced another 75 basis point hike on September 21.
Hence, the investors should focus on all the possibilities and the highly volatile state of the market, which may affect the broader market performance, before making any decisions.