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Viva Lost Wages: 8 Casino Stocks That Are on a Roll

Written by: Frank Byrt 04/23/12 - 8:19 AM EDT
Tickers in this article: WYNN PENN LVS ISLE MPEL BYD MGM ASCA

Investor takeaway: Its shares are up 7.3% this year and have a three-year, average annual return of 12%. Analysts give its shares eight "buy" ratings, and eight "holds," according to a survey of analysts by S&P. Analysts estimate it will earn $2.23 per share this year and $2.42 in year 2013, a 9% increase.

5. Penn National Gaming(PENN)

Company profile: Penn National, with a market value of $3.6 billion, is the second-largest operator of regional casinos in the U.S., with over $2.4 billion in revenue and over 20 properties in 14 states and Canada.

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Investor takeaway: Its shares are up 17% this year and have a three-year, average annual return of 16%. Analysts give its shares six "buy" ratings, six "buy/holds," 10 "holds," and one "weak hold," according to a survey of analysts by S&P. Analysts estimate that it will earn $2.26 per share this year and $2.70 in 2012, which is 19% growth.

4. Wynn Resorts(WYNN)

Company profile: Wynn, with a market value of $13 billion, is an operator of luxury casinos and resorts, including: Wynn Macau and Encore in China, and Wynn Las Vegas and Encore on the Las Vegas Strip. Its first-quarter earnings are due April 25.

Dividend Yield: 1.5%

Investor takeaway: Its shares are up 17.7% this year and have a three-year, average annual return of 66%. Analysts give its shares seven "buy" ratings, eight "buy/holds," and 10 "holds," according to a survey of analysts by S&P. Analysts estimate it will earn $5.88 per share this year (after earning $1.39 per share last year) and $6.92 next year, which is 18% growth. S&P has it rated "buy," with a $131 price target, a 4% premium to the current price.

Morningstar says it "stands to benefit from an imbalance in demand and supply in the Chinese gambling market, with industry revenue projected to grow 12%-15% annually over the next five years and supply expected to grow only 5% per year, which will drive (earnings before interest, taxes, depreciation and amortization) and free cash flow higher, without significant investment."

3. Melco Crown Entertainment(MPEL)

Company profile: Melco, with a market value of $2.5 billion, engages in the development, ownership, and operation of casino gaming and entertainment resort facilities in Macau.