There is an age-old saying, “the house always wins”. An investor might be amazed at the dividends and potential growth opportunities popular casino stocks have. There are certain publicly traded Expensive Casino stocks that pay dividends to the owners.
It goes without saying that casinos carry a fair amount of risk. The industry is prone to recessions. For instance, when the economy expects a downturn, clients cut down drastically on gambling. Major Expensive casino stocks saw their earnings plummet during the great recession. Normally, the stock is evaluated in terms of rankings. This is support by earnings per share or growth potential and it can be a dividend yield.
Let’s take a look at some of the most expensive casino stocks.
The company runs casino and gaming entertainment facilities across Asia. 13% of revenue is generate in the Philippines and 87% in Macau. As part of the gaming industry in Macau, it is one of the most leverage companies and is expected to experience a downturn due to the COVID-19 pandemic.
However, there is a silver lining as the virus spread has declined drastically in China, in the last few months. But nothing is certain as there is no vaccine for COVID-19 yet. If the decline in COVID-19 cases trend continues in China Expensive Casino, Melco Resorts are expect to have a better financial turnaround during the second half of the year.
Once the impact of Coronavirus is lessen, the company can expect to receive financial growth similar to the year, 2018. It attracted a lot of investors from Cotai, due to the improvements in mass transportation.
The company is expanding at a massive level in Macau. It is well on its way to acquire a license to open a well-integrated restaurant in Japan. This series of initiatives are expect to create massive growth, once the situation becomes normal in the market.
In Las Vegas, Wynn Resorts runs Wynn and Encore Las Vegas. In Macau, the company runs Wynn Palace and Wynn Macau. Sadly, the company is feeling the impact of the Coronavirus pandemic in all of its operational regions. In February 2020, gross gaming revenue in Macau dropped to 87.8% and in May, it’s expected to drop even further to 65%. However, the company expects to create some positive growth because of its growth pipeline. According to market experts, the company can expect to earn $7.00 per share. An average growth rate of 14.9 % has been projected for the year 2025.
On the other hand, if the stock can gain the fair valuation level in the coming few years, due to the expanding valuation principle, it is anticipat to cash in on a 2.3% annualized gain. But at the same time, the stock has performed remarkably high ratios during the last decade. In fact, due to the high debt load, the market is in a volatile phase.
The company operates hotels, resorts, and conference halls in China and the US. Nearly 81% of revenue is generate from the China market. Among all the stocks mentioned, this one has the least exposure to Macau. For this reason, it suffered the least because of the trade war between China and the US.
Because of the widespread Coronavirus, the company went on to suspend all its casino operations in Las Vegas, on March 16th. According to the latest financial reports, the revenue grew from 4%, and from a loss of $ 0.03 per share, it turned over to a profit of $0.08 per share.
The company has gone on to post losses for a period of 6 years. It has a weak balance sheet with net debt of approximately $18 billion and the interest expense of the company takes up a major chunk of operating profit.
Las Vegas Sands
It is a leading operator and developer of integrated resorts in the US and Asia. Due to the Coronavirus, a vast majority of the casinos in the US are expect to be closed for a prolong period of time. For this reason, the company is expect to take a major financial hit. Although, looking beyond this year, the company has a positive road map ahead. The company plans to expand its Macau properties.
In addition, the company would benefit immensely from the emergence of a light railway system connecting Macau to the entire state of China. This project is expect to increase the number of casino visitors. Due to all of these developments, the company is expect to achieve earnings of 6.3% per share in the next 5 years.
Nobody can guarantee when the Coronavirus crises will end. To explain the severity of the downturn, most of the Expensive Casino companies in the US have asked Congress for help. A host of industries have been adversely affected by the virus. The casino operates will see their losses accumulate with a major impact on their profits.
Therefore, it is important for investors to figure out if companies can cope in relation to the looming effects of the COVID-19 pandemic.
In the meantime, you can play all your favorite online casino games on a safe and secure platform such as Party Casino. It’s a great way to stay entertained while maintaining social distancing.