In this article, we discuss the best casino stocks that pay dividends.
The casino industry is making a comeback after the setbacks caused by the pandemic in 2020. It took a while for the sector to recover, with several factors at play, but the rebound is now clear with the easing of social distancing measures. Data from the Gaming Inspection and Coordination Bureau showed that Macau’s gaming revenue surged by 14.8% in August this year, surpassing expectations. The increase in demand for entertainment during China’s summer vacation has driven growth in the world’s largest casino hub. Casino stocks fall under the larger leisure and hospitality sector and are affected by a range of influences, such as the state of the economy, consumer spending habits, and changes in gambling regulations.
Also read: 10 Best Casino Stocks To Buy According to Analysts
Investor confidence in the casino industry has also skyrocketed, thanks to their ability to consistently hit it out of the park over the years. Casino revenues experienced a notable increase in 2023. Additionally, online casinos, which mainly gained importance during the pandemic, also posted record earnings last year. A report by the American Gaming Association (AGA) revealed that brick-and-mortar casino slots and table games generated a record $49.4 billion in 2023, marking a 3.3% increase over 2022. On the state level, 19 out of 27 traditional gaming markets achieved record annual revenues. Online casino revenue also surged in 2023, growing 22.9% year-over-year to $6.2 billion across the six states with fully legalized iGaming. The report further highlighted that 12 of the top 20 commercial casino gaming markets saw revenue growth, with the Las Vegas Strip leading the way with the most significant year-over-year gains.
The casino industry, like many others, is evolving quickly to keep up with current trends. In a recent move, Singapore has made changes to the Casino Control Act, allowing its two casinos to offer cashless gaming options, though cryptocurrencies will not be permitted, as reported by CNA. Cashless bets can be placed at gaming tables or machines by using virtual credits from cashless gaming accounts or e-wallets. This adjustment is the most recent update to casino regulations in Singapore, which had previously tightened rules by lowering the threshold for monitoring cash deposits at casinos to prevent misuse by terrorist and criminal groups.
The shift to cashless betting has highlighted people’s growing preference for digital platforms. The pandemic underscored the need for contactless options while still allowing people to enjoy these activities. Sports betting is also becoming more prominent since it operates through digital channels, providing a similar thrill to that of casinos. According to the AGA, while commercial gambling revenue is on the rise in most states where it’s legal, the growth in sports betting and online gambling is outstripping that of traditional casinos. So much so that it seems that Americans are withdrawing funds from their stock brokerage accounts to support their online betting habits. This is the main conclusion from a recent working paper titled Gambling Away Stability: Sports Betting’s Impact on Vulnerable Households. The paper suggests that for every dollar spent on sports betting, net investments in stocks and other financial assets decreased by just over $2. With that, will now take a look at some of the best casino stocks that pay dividends.
A close-up of a roulette wheel in a luxurious casino.
Our Methodology:
For this list, we scanned Insider Monkey’s database of Q2 2024 and selected companies that are involved in the casino and gambling industry. These companies own and operate casinos, resorts, and other gaming and entertainment facilities. From the resultant list, we picked the 10 best casino stocks that pay dividends to shareholders and ranked them in ascending order of the number of hedge funds having stakes in them as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. Four Corners Property Trust, Inc. (NYSE:FCPT)
Number of Hedge Fund Holders: 9
Four Corners Property Trust, Inc. (NYSE:FCPT) is an American real estate investment trust company that specializes in owning and leasing restaurant and retail properties. The company gains significantly from regular acquisitions to expand its portfolio. Recently, it revealed the purchase of 19 Bloomin’ Brands restaurant properties, which include a total of 20 restaurants, for $66.4 million. These properties are divided into two long-term master leases, each covering ten restaurants, and are leased to corporate entities of Bloomin’ Brands. As a result of this transaction, Darden Restaurants will now account for less than 50% of the company’s cash rent. This partnership highlights the key role Bloomin’ Brands plays in FCPT’s overall revenue. The stock has surged by nearly 16% since the start of 2024.
As of June 30, 2024, Four Corners Property Trust, Inc. (NYSE:FCPT)’s rental portfolio includes 1,154 properties across 47 states. These properties are 99.6% occupied (based on square footage) and are under long-term net leases, with an average remaining lease term of about 7.4 years. The company’s performance for the second quarter of 2024 remained strong. Its total revenue came in at $66.4 million, which showed a 10% growth from the same period last year. Its net income attributable to shareholders was $24.7 million, up from $23.6 million in the prior-year period.
Four Corners Property Trust, Inc. (NYSE:FCPT), one of the best casino stocks, has been growing its dividends consistently since 2016. The company currently offers a quarterly dividend of $0.345 per share and has a dividend yield of 4.66%, as of September 12.
At the end of Q2 2024, 9 hedge funds in Insider Monkey’s database held stakes in Four Corners Property Trust, Inc. (NYSE:FCPT), which remained unchanged from the previous quarter. These stakes have a total value of nearly $30 million. Among these hedge funds, Marshall Wace LLP was the company’s leading stakeholder in Q2.
9. Golden Entertainment, Inc. (NASDAQ:GDEN)
Number of Hedge Fund Holders: 11
Golden Entertainment, Inc. (NASDAQ:GDEN) is a Nevada-based entertainment company that operates casinos, taverns, and slot routes. The company was formed in 2015 as a result of a merger between Golden Gaming and Lakes Entertainment. The stock hasn’t been doing really well this year, falling by over 21% since the start of 2024. The company is experiencing competition pressure, reporting revenues of $167 million in the second quarter of 2024, which fell significantly by over 41% from the same period last year.
That said, Golden Entertainment, Inc. (NASDAQ:GDEN) is making consistent efforts to strengthen its balance sheet. Since 2021, the company has repaid $750 million of debt through free cash flow and non-core asset sales. It also actively returned capital to shareholders through its regular dividend and by repurchasing nearly one million shares. With solid operating cash flow and a strong balance sheet, it plans to maintain both strategic and financial flexibility while continuing to return capital to shareholders throughout the year.
Golden Entertainment, Inc. (NASDAQ:GDEN) initiated its dividend policy in March this year. The company offers a quarterly dividend of $0.25 per share. Since the start of its dividends, it has returned $14.3 million to shareholders through dividends, which makes GDEN one of the best casino stocks that pay dividends. The stock’s impressive dividend on September 12 came in at 3.19%.
As of the close of Q2 2024, 11 hedge funds in Insider Monkey’s database owned stakes in Golden Entertainment, Inc. (NASDAQ:GDEN), compared with 14 in the previous quarter. These stakes have a total value of more than $103 million. With over 1 million shares, Hill Path Capital was the company’s leading stakeholder in Q2.
8. Monarch Casino & Resort, Inc. (NASDAQ:MCRI)
Number of Hedge Fund Holders: 14
Monarch Casino & Resort, Inc. (NASDAQ:MCRI) ranks eighth on our list of the best casino stocks that pay dividends. The company specializes in gaming and hospitality, primarily in casino operations and resort development. It operates in two locations, one in Reno, Nevada, and the other in Blackhawk, Colorado. Both properties have performed well, as shown in the latest period. In the second quarter of 2024, Monarch Black Hawk saw revenue growth across all business segments and improved its adjusted EBITDA margin. The property continued to attract mid- and upper-tier customers from the larger Denver area.
During the second quarter of 2024, Monarch Casino & Resort, Inc. (NASDAQ:MCRI) completed the redesign and upgrade of 125 more hotel rooms at Atlantis, leaving 246 rooms still to be finished. The goal is to have all 817 hotel rooms and suites fully redesigned and upgraded by the end of the second quarter of 2025. Although Reno remains a highly competitive market, the company believes that its emphasis on operational efficiency and property improvements through significant capital investments will help maintain its competitive edge and deliver long-term financial benefits.
When it comes to its financial health, Monarch Casino & Resort, Inc. (NASDAQ:MCRI) supports a strong balance sheet. As of the most recent quarter, the company holds $37.4 million in total debt, with a low debt-to-equity ratio of 0.07. In addition, it ended the quarter with over $33.5 million available in cash and cash equivalents and had over $672.3 million in total assets.
Monarch Casino & Resort, Inc. (NASDAQ:MCRI) started paying dividends in 2023 and has paid regular dividends to shareholders since then. Its quarterly dividend comes in at $0.30 per share for a dividend yield of 1.60%, as of September 12.
The number of hedge funds tracked by Insider Monkey owning stakes in Monarch Casino & Resort, Inc. (NASDAQ:MCRI) grew to 14 in Q2 2024, from 11 in the previous quarter. These stakes have a total value of nearly $40 million.