10 Best Hotel Stocks To Buy Now

3. MGM Resorts International (NYSE:MGM)

Number of Hedge Fund Holders: 44                                                    

MGM Resorts International (NYSE:MGM) is the largest resort operator on the Las Vegas Strip, with 35,000 hotel guest rooms and suites accounting for roughly one-fourth of all units in the market. The MGM Grand, Mandalay Bay, Park MGM, Luxor, New York-New York, and Bellagio are among the company’s properties in Las Vegas. In 2023, the Strip accounted for around 62% of all EBITDAR. The US sports and iGaming divisions of MGM presently account for a high single-digit portion of their overall revenue. In early 2018, a new resort on the Cotai Strip opened under the company’s ownership, which also includes the 56 %-owned MGM China casinos.

Following the Chinese government’s removal of COVID limitations on January 8, 2023, MGM Resorts’ Macao sales, which accounted for 17% of 2023 EBITDAR, experienced a significant resurgence in 2023, surpassing 2019 levels in the second quarter. Additionally, despite the increased operational risk that comes with government monitoring in Macao, the company is still well-positioned to take advantage of the region’s promising long-term growth prospects, as per analysts.

MGM should benefit from its dominant omnichannel presence in the US in the fiercely competitive sports betting and iGaming growth areas. Furthermore, Morningstar analysts anticipate that the firm will have a Japanese-integrated resort in 2030, which will contribute about 3% of overall EBITDAR and yield competitive returns on capital investments in the low teens.

Citing solid Q2 2024 performance across all segments and a bullish outlook for the company’s International Digital division, BTIG analyst Clark Lampen has reaffirmed a “Buy” rating on MGM Resorts with a $52.00 price objective. JMP Securities also maintained a “Buy” rating with a price objective of $57.00.

MGM Resorts International (NYSE:MGM)’s diversification is contributing to the expansion of its revenue stream and its client base, which are increasing the company’s earnings and margins.

Keith Meister’s Corvex Capital is the largest shareholder in the company, with 5,859,478 shares worth $260.40 million.