For many, casinos provide a form of escapism that’s synonymous with a luxury vacation. When managed properly, they can also be very lucrative, making them a great investment. Here we’ll discuss the best casino stocks to add to your portfolio.
The casino industry has struggled this year as a result of the coronavirus pandemic. Many casino companies were forced to shut down their resort properties to comply with local restrictions.
However, casinos managed to adapt to this new normal fairly quickly. In many parts of the world, casinos are now open, albeit with strict social distancing requirements. While revenue hasn’t fully returned to normal, casinos are starting to see the light at the end of the tunnel. Here are the best casino stocks to add to your portfolio today.
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Best Casino Stocks To Buy
Caesar’s Entertainment (NASDAQ: CZR)
Caesar’s Entertainment is the largest casino company in the United States. In July 2020, the original Caesar’s Entertainment merged with Eldorado Resorts. This created a massive gaming empire that runs five nationally recognized gaming brands.
They have properties in 16 states, including eight on the Las Vegas strip. If you’re looking purely at market share in the US, Caesar’s Entertainment has plenty going for it.
Since their properties aren’t concentrated in one geographical market, it minimizes their financial risk. COVID-19 restrictions are different in each state, so if one property needs to close completely, they can focus on others to compensate.
Caesar’s Entertainment has also recently acquired William Hill, a digital sports betting company. Sports betting is very trendy right now, and since it can be done online, there’s huge revenue potential regardless of current coronavirus restrictions.
Caesar’s stock bounced back from the stock market crash swimmingly. Current market data shows their share price at an all-time high as of mid-December 2020. However, analysts are predicting that prices could go even higher. Now is a great time to buy for strong returns later in 2021 and beyond.
Ballys Corp. (NYSE: BALY)
Ballys currently operates eleven gaming properties in six different states. Unlike many of the other casino stocks on this list, they don’t have any properties in Las Vegas. They’re based in Rhode Island, but have expanded into many other markets for a diverse portfolio.
This company has seen huge earnings growth this year. Their earnings per share have gone up dramatically year over year, especially in comparison to the rest of the casino industry. This is particularly impressive in such a tough year when many other companies have struggled to keep afloat.
Much of Ballys’ growth this year happened as a result of their acquisitions. In 2020 alone, they have made deals to acquire nine new casino properties. They also reached a deal with Sinclair Broadcast Group to provide interactive sports betting experiences.
Ballys’ deal with Sinclair could be lucrative even if COVID-19 restrictions continue. This is because their sports betting services are largely virtual.
This company’s share price is currently at an all-time high, but if they keep up their growth, it will likely continue pushing even higher. With a rapidly increasing market share and great returns this year, Ballys looks like a smart pick moving forward.
Largest Casino Stocks
MGM Resorts International (NYSE: MGM)
The MGM Resorts name is synonymous with Las Vegas glitz and glamor. Their lavish resorts contain casinos as well as luxury hotels, dining, shopping, and other forms of entertainment. In addition to their properties in Las Vegas, MGM also runs casinos in seven other US states and in China.
MGM Resorts stock is slowly recovering from the initial stock market crash of the pandemic. They’ve been hit hard by the closure of their hotels and dining, even as some of their casinos have been able to stay open. However, they’ve taken steps to adapt to the new challenges of the pandemic.
One of the ways that MGM Resorts has adjusted is by focusing on their sports betting subsidiary, BetMGM. This allows them to generate revenue digitally regardless of current coronavirus restrictions.
In December 2020, BetMGM announced that they would be partnering with the Pittsburgh Steelers. They are also launching their first online casino in Pennsylvania. Both of those announcements bolstered the stock’s growth.
MGM Resorts also has a very diverse portfolio, with properties in a wide range of markets. This means they haven’t been hit as hard by restrictions in a specific market, like Macau or Las Vegas.
Overall, MGM Resorts is a great portfolio pick. Their current earnings per share data indicates they are fairly valued. Since their stock may increase significantly as COVID restrictions ease, now could be a good time for investors to pick up shares of this casino gaming powerhouse.
Wynn Resorts (NASDAQ: WYNN)
Wynn Resorts is one of the most prominent companies in the casino industry. They have two luxury properties on the Las Vegas strip, as well as two properties in Macau and one in the Boston metro area. Their resort properties include casinos as well as luxury hotels, restaurants, shopping, nightclubs, theaters, and golf courses.
Despite struggles earlier this year, Wynn Resorts has slowly rallied. Share prices have more than doubled from their March lows. Investors seem optimistic that both the Las Vegas and Macau markets could bounce back sooner than expected, given positive coronavirus vaccine news.
Investors should still be somewhat cautious when investing in Wynn Resorts right now. Their third quarter earnings report underperformed investors’ expectations. However, they have started to see their gambling revenues slowly increase. The total number of visitors to their properties has gone up as well.
Wynn Resorts is a key player in the luxury casino market. While it may take some time for them to fully recover, their upward trajectory is promising. Wynn could be a great casino stock to add to your portfolio for long term growth.
Casino Stocks To Buy Now
Monarch Casino & Resort (NASDAQ: MCRI)
Monarch Casino & Resort is a gaming and hospitality company based in Reno, Nevada. They currently operate two properties – the Atlantis Casino Resort & Spa in Reno, and the Monarch Casino Black Hawk in Colorado.
Monarch’s third quarter earnings report was very exciting for investors. As many other casinos struggled, Monarch saw a year over year increase in net income and gaming revenue, even though their overall revenue fell. Their current earnings per share data also indicates that they are a fairly valued stock.
With this positive performance, Monarch stock has seen steady growth over the past several months. Their positive financial performance has shown that they know how to stay afloat, even in tough times. Monarch Casino & Resort is definitely a stock worth adding to your portfolio as casinos start to open up again.
Penn National Gaming (NASDAQ: PENN)
Penn National Gaming has a full portfolio of casinos and gaming facilities throughout the United States. While they have ownership stakes in a few of their properties, many are leased and managed. Many of their casinos are part of either the Hollywood Casino or Ameristar brands.
One of the things that makes Penn National Gaming attractive is that their casinos aren’t concentrated in one geographical market. This means that if they encounter strict coronavirus gambling restrictions at one casino, they will likely be able to balance out those losses with another property in a different state.
To offset the challenges of the coronavirus pandemic, Penn has focused more on online gambling and sports betting this year. Many states loosened their gambling restrictions this election cycle as well. This will allow Penn to continue to diversify their operations and draw in money regardless of the current economic climate.
Penn’s stock is currently trading at an all time high. However, they aren’t showing any signs of slowing down – they’re planning to buy another Hollywood Casino property in December 2020. This is one of the top casino companies to add to your portfolio this year.
Las Vegas Casino Stocks
Las Vegas Sands (NYSE: LVS)
As the name implies, Las Vegas Sands is a casino company with properties in Las Vegas as well as in Asia. Their Asian properties are in Macau and Singapore.
While Las Vegas Sands stock dropped as a result of the coronavirus pandemic, they are slowly on their way back up right now. They are a very well-established company that had been steadily increasing their revenue and paying dividends up until the pandemic hit. They own some of the world’s most iconic luxury casinos, including The Venetian.
Las Vegas Sands has a strong presence in the Macau market, which has huge potential for the future. Although this Asian market has stagnated in the later months of 2020, they stand to come back strong as coronavirus restrictions ease up in China.
It’s likely that Las Vegas Sands stock will rebound to its former glory when travel picks up around the world. They’ve previously proved their ability to stay afloat in a competitive industry, and now is a great time to buy Las Vegas Sands stock at a lower price.
Best Online Casino Stocks
DraftKings (NASDAQ: DKNG)
Digital sports betting has exploded this year, and DraftKings is a company that’s leading the charge. As coronavirus restrictions limited in-person gambling, many people started looking online for similar entertainment options.
This year, DraftKings has signed notable business deals that will likely increase their visibility and bring in more revenue. They’ve become exclusive partners of many major league sports teams, and they’ve even signed a deal with ESPN.
Many US states are lifting their restrictions on digital gambling, which bodes very well for DraftKings moving forward. Digital sports betting has huge potential, as it could make gaming more accessible to those who don’t have a casino accessible nearby.
DraftKings’ earnings improved in the third quarter of this year as major league sports returned. Their unique business model makes them an exciting stock pick for those interested in online gambling.
Macau Casino Stocks
Melco Resorts (NASDAQ: MLCO)
Macau is a city in China that is often referred to as the Las Vegas of Asia. Melco is a successful casino company based in Hong Kong. They have a huge presence in Macau and are also expanding into Manila and Cyprus.
The Macau market has grown rapidly over the past decade, although the coronavirus pandemic stalled operations. The casino industry has been slowly shifting towards this Asian metropolis, and when the economy recovers, there’s plenty of potential for market growth.
Melco’s earnings have struggled in the short term as many of their properties have had to close or alter their operations. However, this could be a great long-term investment for the future. Shares right now are affordable, giving investors potential for income when China opens back up.
Should I Buy Casino Stocks?
Now is a great time to buy casino stocks. Many popular casino companies, like MGM and Wynn, have seen their share prices drop this year. However, these drops are due to COVID-19 restrictions, not a poor business model.
As a result, casino stocks are relatively affordable right now. Investing in these companies now while shares are cheap could result in huge returns over the next few years as business returns to normal.
Casinos and the resorts associated with them are an integral part of the travel and entertainment industry and won’t be going anywhere anytime soon. However, the top casinos aren’t resting on their laurels – they’re taking steps into online gaming to ensure they’re still bringing in revenue.
When choosing casino stocks, look at their most recent earnings reports, as well as their earnings before the pandemic. This will give you an indication of how financially stable they are. You should also look at their property portfolio to ensure that they are involved in diverse markets.
Casino Stocks: Final Thoughts
The casino industry may have struggled this year, but you shouldn’t write it off. In fact, now just might be the right time to invest.
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