Penn National Gaming
This company made a huge Las Vegas purchase in 2016 to bolster its gaming portfolio. Penn National Gaming Inc. (NASDAQ: PENN) owns, operates or has ownership interests in gaming and racing facilities and video gaming terminal operations, with a focus on slot machine entertainment.
As of December 31, 2017, the company operated 29 facilities in 17 jurisdictions, including California, Florida, Illinois, Indiana, Kansas, Maine, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario, Canada. As of December 31, 2017, in aggregate, Penn National Gaming operated approximately 36,700 gaming machines, 820 table games and 4,800 hotel rooms.
Deutsche Bank has set its price target at $37. The consensus target is $36.00, and the shares closed Thursday at $34.08.
Red Rock Resorts
This is another company that focuses on the lucrative Las Vegas locals market. While Red Rock Resorts Inc.(NASDAQ: RRR) is a leading casino operator that primarily operates in the Las Vegas, it also manages two Native American tribal facilities, in northern California and western Michigan.
The company operates 19 casino and entertainment properties in the Las Vegas locals market. In May 2016, Red Rock announced an agreement to acquire the Palms Hotel and Casino in Las Vegas for $312.5 million. The company’s solid presence in Las Vegas helped drive very solid overall results, despite a messy fourth quarter in which EBITDA came in below expectations.
Investors receive a 1.16% dividend. The $39 Deutsche Bank price target compares with the consensus target of $36.45. The shares closed Thursday at $34.44.
This top company saw the departure of its namesake founder earlier this year. Wynn Resorts Ltd. (NASDAQ: WYNN) operates Wynn Macau and Encore at Wynn Macau resort located in the People’s Republic of China.
The Macau resorts feature approximately 284,000 square feet of casino space, which offers 24-hour gaming and a range of games, with 458 table games and 708 slot machines, private gaming salons, sky casinos and a poker. Its two luxury hotel towers have a total of 1,008 guest rooms and suites, as well as casual and fine dining in eight restaurants, approximately 57,000 square feet of retail shopping in stores and boutiques, approximately 31,000 square feet of space for lounges and meeting facilities, and the Rotunda show. Recreation and leisure facilities include two health clubs, spas, a salon and a pool.
The company also owns and operates the Wynn Las Vegas and Encore at Wynn Las Vegas resorts, with a total of 4,748 hotel rooms, suites, and villas; 232 table games; 1,866 slot machines; a race and sportsbook and poker room in approximately 186,000 square feet of casino gaming space, including a sky casino and private gaming salons.
Wynn shareholders are paid a 1.53% dividend. Deutsche Bank has a $219 price target. The consensus price objective was last seen at $213.50, and the shares closed most recently at $196.01.
These are five outstanding stocks for investors to add to portfolios for a gaming and lodging presence. It should be noted the sector is very cyclical, and downturns in the economy tend to hit the shares harder than most. With that in mind, they all look poised for a solid lift from the changes in sports gambling, and that’s when investors could see some big gains from the gaming industry.