Melco Crown Entertainment Ltd (ADR) (MPEL), Las Vegas Sands Corp. (LVS), Wynn Resorts, Limited (WYNN): The Best Stock in Gaming

The top stock in gaming

When you consider the weakness in U.S. regional gaming, it’s easy to write off Caesars Entertainment immediately. Beyond that, Macau is growing faster than Las Vegas, and Cotai is growing faster than the Macau Peninsula. That weights my opinion heavily to Cotai and the current and future operators there.

I’d give an edge to Melco Crown over Las Vegas Sands Corp. (NYSE:LVS) because it is adding to a smaller casino base, but that’s where the debate becomes a toss-up. MGM’s results are leveraged by debt, which could help the stock outperform, Melco Crown has expansions with a lot of unknowns, and Wynn Resorts, Limited (NASDAQ:WYNN)’s Cotai resort makes it look inexpensive long term.

This quarter, I’ll split my picks into two categories based on risk. The low-risk pick based on the values above is Wynn Resorts. The company has a good balance sheet and pays a $1 quarterly dividend along with a regular special dividend, making this a good option for those looking for income. The riskier pick goes to Melco Crown, which has a great balance sheet and will continue to generate strong returns from City of Dreams on Cotai. We don’t know how big The Philippines market will be, and if or when Studio City on Cotai will get table games, which adds risk to the stock.

If all of the dominoes fall correctly, Melco Crown could continue its incredible run. But for those looking for a little safer pick, Wynn Resorts is at the top of the list.

The article The Best Stock in Gaming originally appeared on Fool.com and is written by Travis Hoium.

Fool contributor Travis Hoium manages an account that owns shares of Wynn Resorts, Limited. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.