Beating Vegas With These Gaming Stocks: MGM Resorts International (MGM) and More

The Wynn Resorts, Limited (NASDAQ:WYNN)

The Wynn is conveniently tucked at the end of the Las Vegas Strip along with partner hotel, The Encore. Much like Las Vegas Sands, this set of resorts is diversified between Las Vegas and Macau, it comes with a high P/E ratio of 22.94 and it also pays a dividend. The Wynn dividend is an incredible 3.3% yield, which could make this the most appealing of the casino stocks.

To verify its appeal I took a quick peek at the numbers. We have 15.11% expected growth in earnings this year and a further 15% growth next year according to the company’s analysts. Those are some pretty good numbers.

A couple of red flags on this stock for any prospective investors would be the enormous amount of debt to equity ratio and the incredibly high price to book values. Long term debt to equity is sitting at 14.06 while price to tangible book value is all the way up at 32.64.

Bottom Line

Vegas isn’t dying. Tourism there is on the up, and it will likely continue on the up for the foreseeable future. These companies know where the money is, and they will continue to expand into the bigger markets around the world. The only problem I see for the three of them is if gambling is permitted in more states around the country, or even online. If that does happen, people won’t just quit going to Vegas, the city has so much more to offer than that.

In terms of the individual companies, I like MGM. MGM may be in a lot of debt, and they may not be turning a profit, but I don’t think it will be that way forever. They have too many casinos across the strip and a very nice MGM Grand in Macau.

After MGM, I’d have to go with Wynn. They pay a great dividend and have an incredible presence in both Las Vegas and Macau. When it comes to service, the Wynn is the place to beat.

The article Beating Vegas With These Gaming Stocks originally appeared on Fool.com and is written by Ash Anderson.

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