Encore Casino Stock
2021年7月5日Register here: http://gg.gg/v92r0
Find encore casino stock images in HD and millions of other royalty-free stock photos, illustrations and vectors in the Shutterstock collection. Thousands of new, high-quality pictures added every day. The COVID-19 pandemic has been rather disruptive for many companies operating in the hospitality, travel and tourism sectors, including casino operators like Wynn Resorts (NASDAQ: WYNN).On March. Why Wynn, MGM Resorts Are Trading Higher Today. The global pandemic has been devastating to casino stocks in 2020, but optimism surrounding a COVID-19 vaccine has lifted a number of casino stocks on Thursday.Casino shares are trading higher potentially amid the beginning of vaccine rollouts, which could help casinos and other hotel and leisure companies regain demand.MGM Resorts International. Why Wynn, MGM Resorts Are Trading Higher Today. The global pandemic has been devastating to casino stocks in 2020, but optimism surrounding a COVID-19 vaccine has lifted a number of casino stocks. EVERETT, Mass., March 14, 2020 /PRNewswire/ - In consultation with the Massachusetts Gaming Commission, Encore Boston Harbor today announced that it will be closed to the public for two weeks.© Provided by The Motley Fool Why Would Anyone Want to Buy Wynn Resorts Stock?
Shares of Wynn Resorts(NASDAQ: WYNN) are up 40% over the past month and have nearly tripled from the lows hit during the broad market sell-off in March.
Investors are betting the casino industry will be soon bouncing back, and because Wynn’s operations are heavily weighted toward Macao -- the only place in China where it is legal to bet -- it could see a recovery sooner rather than later as the tiny peninsula saw a promising recovery in gaming revenue in October.
Yet for all the wagers being placed on the casino operator continuing its hot streak, here are five reasons why investors may want to hedge their bets.© Wynn Resorts Wynn Palace in Macao with fountains in the foreground. 1. Macao has a long road to recovery
Las Vegas Sands is reportedly considering selling its Las Vegas properties to go all in on Asia, primarily Macao, but for the time being, Wynn Resorts has more exposure to the market as it derives about three quarters of its adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) from the city. Popular Searches
Macao did see a spike in gambling in October, but gross gaming revenue (GGR) was still down 72.5% year over year. While that’s much better than the 90% or greater declines it had been experiencing during the pandemic, this gain was driven by the national Golden Week holiday that brought more gamblers into the city.
Analysts initially thought conditions would continue to improve, and November would see GGR decline in the 60% range, but instead, the gains have stalled, and gaming revenue last month was again down 70.5% from the previous year. 2. Too exposed to the VIP market
High rollers have long been the mainstay of the Macao casino industry, but the premium mass and mass-market gaming crowds are quickly becoming the priority. Unfortunately, Wynn Resorts still relies most heavily on the VIP crowd, and in its third-quarter report, the company noted, ’VIP table games win as a percentage of turnover was 1.04%, below the [Wynn Palace’s] expected range of 2.7% to 3.0% and below the 3.19% experienced in the third quarter of 2019.’ However, at Wynn Macau, the VIP win was 3.95%, above the expected range and the prior year’s result too.
China is also cracking down on junket operators who shuffle VIP gamblers to casinos in foreign markets. While that should help Macao properties, the high rollers really don’t want to be in the spotlight and may choose to lie low as they did the last time Beijing cracked down on junkets.
Wynn did say its mass market table drop, or the amount of money gamblers were betting, was at roughly 40% of its pre-COVID-19 levels, while its junket operations had come back to between just 25% to 30%. But that could indicate an overall weakness going forward rather than its business tilting toward more of a mass audience. 3. Las Vegas is poised to crash again
Just as Las Vegas looked like it was getting back its sea legs, albeit within the parameters of the new social order imposed by the pandemic, the state of Nevada is prepared to send the industry into a tailspin again.
State officials cut capacity limits going into the Thanksgiving holiday, going from 50% down to 25% with the hope that it will be for just three weeks, much as when the pandemic began, and many believed closing the economy for two weeks would be sufficient time to prevent a major outbreak. Eight months later, and businesses are only just recovering.
The Wynn Encore on the Las Vegas Strip has been already operating at reduced levels, closing three days a week because of decreased demand, and it now faces further restrictions, which will prolong the hoped-for recovery.4. Late to the sports-betting game
If there’s been one bright spot in gambling during the pandemic, it has been sports betting, particularly online wagering. Wynn Resorts, however, has lagged its rivals and only just got up and running with internet and sports wagering in New Jersey, which has become the sports-betting capital of the country.
Wynn had hoped to make up for lost time by partnering with Sinclair Broadcasting on its regional sports TV networks but lost out to Bally’s, owned by Caesars Entertainment, which will use the opportunity to rebrand the Sinclair networks with its own name and try to attract people to its sports-betting platform.5. Unknown knowns
The license-renewal process for casinos is still a wildcard. Although existing operators are expected to win their concessions back if and when regulators start the process, the concession awards may see more local operators allowed into the currently limited sphere of influence.
Also, Wynn Resorts co-founder Elaine Wynn was just forced out of all management ties with the casino because of its age policies. With both her and her former husband Steve Wynn now gone from the picture, it’s the passing of an era for two visionary leaders of the industry.Long odds
I’m still confident in the long-term growth of Wynn Resorts, but the casino operator has come very far, very fast, suggesting investors are betting a return to normalcy is right around the corner. Although there’s reason to hope for further gains -- eventually -- and that consumers will flock to to casinos once more, there are a lot of headwinds Wynn and the industry still face in the months ahead.
Because Wynn is a world-class operator with a long track record, I don’t see it going away, but I would not be putting all my chips on this stock right now.
Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. SPONSORED:
10 stocks we like better than Wynn Resorts
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now.. and Wynn Resorts wasn’t one of them! That’s right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 20, 2020
Updated on September 14th, 2020 by Bob Ciura
As the saying goes, the house always wins. Casinos operate strong business models, as casinos earn a virtually guaranteed profit from the sum of the bets they receive. The relatively attractive economics of casinos make the industry worthy of a closer look.
Investors may be particularly intrigued by the earnings growth and dividends of the major casino stocks. The 4 major publicly-traded casino stocks all pay dividends to shareholders, but they are far from the safest dividend stocks around.
If you are looking for a safer basket of dividend growth stocks, consider the Dividend Aristocrats. They are an elite group of 65 stocks in the S&P 500 Index with 25+ years of rising dividends.
You can download an Excel spreadsheet of all 65 Dividend Aristocrats (with important financial metrics such as dividend yields, P/E ratios, and dividend payout ratios) by clicking the link below:
Click here to download your Dividend Aristocrats Excel Spreadsheet List now.
Casinos are not without a fair amount of risk. Casinos are highly vulnerable to recessions, as consumers typically cut back heavily on gaming when the economy enters a downturn. The four major casino stocks saw their earnings collapse during the Great Recession. A similar impact has taken place to start 2020 due to the coronavirus crisis, which has battered the casino industry.Encore Casino Stock Market
We have analyzed the major casino stocks in the Sure Analysis Research Database, which ranks stocks based upon the combination of their dividend yield, earnings-per-share growth potential and valuation to compute expected total returns. In this article, we will compare the expected 5-year total annual returns of the four major casino stocks.Encore Casino StockTable Of Contents
For this article, stocks are ranked in order of least attractive to most attractive. While 5-year expected returns are incorporated in the rankings, we have also utilized a qualitative screen based on balance sheet strength and overall business quality.
You can instantly jump to a particular section of the article using the links below:Casino Industry Overview
The casino industry is in severe distress right now. The spreading coronavirus and resulting global recession have taken their toll on the casino stocks. The large U.S. casinos are heavily reliant on Macau, the largest gaming market in the world and the only market in China where casinos are legal. As a result, these stocks are very sensitive to any developments that affect the gaming activity in Macau.
This was a significant concern several years ago. In 2014, China initiated an anti-corruption regulatory crackdown, which greatly reduced the gaming activity in the area. Fortunately for the casinos, the downturn lasted for approximately two years and gaming activity in Macau recovered thereafter. Then the gaming activity in Macau faced another headwind, namely the trade war between the U.S. and China.
This headwind lasted for only about a year but now Macau is facing its strongest challenge ever, the outbreak of coronavirus, which has caused a huge hit in the gaming business. Casinos were shut down for an extended period due to the coronavirus. Visa restrictions have also added to the decline in gaming activity in Macau.
As a result, gross gaming revenue in Macau plunged 94.5% in August, compared with the same month last year. Gross gaming revenue in Macau declined 81.6% through the first eight months of 2020. The high sensitivity of casino stocks to all the developments related to China and their pronounced cyclicality means that investors should pick casino stocks carefully.Top Casino Stock #4: Wynn Resorts (WYNN)
Wynn Resorts owns and operates Wynn Macau and the Wynn Palace in Macau, as well as Wynn Las Vegas and Encore in Las Vegas. Since Wynn Resorts is highly leveraged to the gaming activity in Macau, it saw its earnings collapse and it cut its dividend by 62% in 2015-2016 due to the Macau downturn that was caused by the anti-corruption regulatory crackdown in the area. But as Macau strongly recovered in the last three years, Wynn Resorts returned to growth.
Unfortunately, the company is now facing the headwind of coronavirus in all the regions in which it operates. Wynn Resorts reported earnings results for the second quarter on 8/4/2020. Revenue declined 95% year-over-year to $85.7 million, which was $190 million less than expected. The company lost $6.14 per share in the quarter, missing estimates by $1.23. Adjusted property EBITDA was a loss of $322.9 million compared to estimates of a loss of $314 million. This compared unfavorably to adjusted EBITDA of $480.6 million in the second quarter of 2019.
Results for Wynn Resorts were once again severely impacted by the COVID-19 pandemic as properties in Macau were closed for 15 days. Las Vegas operations didn’t open until June 4th.Wynn Palace revenues declined 98.6% as a result. Revenues for Wynn Macau decreased 97.8% while Las Vegas decreased 86% year-over-year. Wynn Resorts suspended its dividend in an effort to conserve capital. Consensus estimates call for a loss of $11.52 per share for 2020.
On the bright side, casinos are gradually reopening, and Wynn Resorts seems to have ample room to grow in the upcoming years thanks to its promising growth pipeline.Wynn Encore Stock
Source: Investor Presentation
The company has made progress in the design of Crystal Pavilion in Macau, which will be a major tourist attraction. In addition, Encore Boston Harbor opened in June-2019 and has exhibited strong performance so far so it has promising growth prospects ahead thanks to expected ramp-up in activity.
Moreover, the company has been caught off guard, with total current and long-term debt outstanding of $12.78 billion and cash and cash equivalents of $3.80 billion. Therefore, the stock is carrying an increased amount of risk right now due to its high level of debt.
However, we believe that the coronavirus crisis will not last beyond this year and we view the long-term growth prospects of the company as intact. We expect 4% annual EPS growth through 2025. Using the company’s current assets, return on assets of 5.6% over the last decade and share count, we believe Wynn Resorts has earnings power of $1.89. We will use this figure to calculate fair value and projected return.
Based off of the earnings power estimate for 2020, the stock is currently trading at a P/E ratio of 44, which is higher than its historical average of 30.1. However, the stock traded at abnormally high P/E ratios in some years due to depressed earnings in those years.
The best poker chip set for home games is MRC Laurel Crown Poker Set, with its premium ceramic build. You can also opt for RINCO Plastic Chips if you only need basic chips for your games. Brybelly Diamond Poker Set and Trademark Poker Set are two other great options that you can use for home games. The best poker chip sets come with everything you need to get started, including dealer buttons and decks of cards. Some sets even come with plaques to represent excessively large amounts of winnings. Trademark Poker Maverick Chip set is one of the best poker chip sets you can buy right now. This is the best in class for the price it offers. You will find really high quality chips which offers a feel similar to an authentic casino-quality clay poker chips. You get an aluminium case along with the poker chips. The best ceramic poker chips for home games are: MRC 500pcs Laurel Crown Ceramic Poker Chips Set with Aluminum Case 500pcs Laurel Crown Ceramic Poker Chips Set Wood CASE Custom Build by MRC. If you’re on the market for a new set, here are some of the best poker chip sets of 2019: Fat Cat, 11.5 grams, 500-count This poker chip set from Fat Cat comes with everything you need to host a game at home. It includes 500 Claytec 11.5 gram poker chips. Best poker chips for home.
For instance, the abnormally rich valuation of the stock during 2015-2017 resulted from the market’s view that the downturn in Macau was temporary. Our target P/E ratio of 18 reflects uncertainty regarding Macau and the coronavirus. If shares reverted to our target P/E by 2025, then valuation would be a 16% headwind to annual returns over this time period.
If the stock reaches our fair valuation level over the next five years, it would reduce shareholder returns by 16%, effectively wiping out earnings growth and dividends over that time period. The stock is markedly volatile due to its high debt load, which is an added risk factor.
As a result, only those who can stomach extreme stock price volatility and have confidence in the ability of Wynn Resorts to navigate through the current crisis should consider buying the stock.Top Casino Stock #3: MGM Resorts (MGM)
MGM Resorts owns and operates casinos, hotels and conference halls in the U.S. and China. The company has the least exposure to Macau in this group of stocks. As a result, it suffered much less than its peers from the trade war between the U.S. and China and the protests of people in Macau a few months ago.
However, the company is highly exposed to the outbreak of coronavirus, just like its peers. Due to the rapid spread of the coronavirus, MGM Resorts suspended all its casino operations in Las Vegas on March 16th and did not accept hotel reservations for the dates prior to May 1st. The company also closed its casino in Maryland.
In late July, MGM Resorts reported (7/30/20) financial results for the second quarter of fiscal 2020. The company began reopening its U.S.properties in the quarter but its revenue plunged -91% over last year’s quarter due to the suspension of the operations of the company in the U.S. and a collapse in gaming revenues in Macau caused by travel restrictions and social distancing.
Source: Investor Presentation
As a result, MGM Resorts switched from a profit of $0.23 per share in last year’s quarter to an adjusted loss of -$1.52 per share.
Due to the unprecedented downturn that has resulted from the pandemic, MGM Resorts cut its dividend by 98% in April. Moreover, in May, it issued $750 million of 5-year bonds at 6.750%. The high interest rate reflects the desperation of the company for funds and the high debt load of the company. Net debt is $20.0 billion, which is nearly twice the current market cap of the stock.
On the positive side, on August 20th, 2020, IAC (IAC) reported a 12% stake in MGM Resorts for approximately $1 billion. IAC has a portfolio of brands and digital expertise, which is expected to help MGM Resorts leverage its digital assets. IAC will join the Board of Directors of MGM Resorts. The stock jumped 12% on the announcement.
Nevertheless, due to the headwind of coronavirus, along with a huge debt load, shareholders should not expect a material boost in dividends and share repurchases for the foreseeable future. That said, the company has a positive long-term outlook for conventions and sports betting in the domestic market, as well as the ramp-up of the recently-built MGM Cotai resort, MGM Springfield, and Park MGM.
As soon as the coronavirus crisis comes to an end, MGM Resorts will benefit from these growth drivers. The company will also enhance its earnings growth via its initiative “MGM 2020”, which aims to expand margins by reducing operating costs and enhancing the efficiency of the company.
Due to the headwind from coronavirus, we expect MGM Resorts to report a net loss in 2020. Earnings-per-share are expected to gradually turn positive, with expected annual growth of 5% through 2025. After the massive dividend reduction,
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Find encore casino stock images in HD and millions of other royalty-free stock photos, illustrations and vectors in the Shutterstock collection. Thousands of new, high-quality pictures added every day. The COVID-19 pandemic has been rather disruptive for many companies operating in the hospitality, travel and tourism sectors, including casino operators like Wynn Resorts (NASDAQ: WYNN).On March. Why Wynn, MGM Resorts Are Trading Higher Today. The global pandemic has been devastating to casino stocks in 2020, but optimism surrounding a COVID-19 vaccine has lifted a number of casino stocks on Thursday.Casino shares are trading higher potentially amid the beginning of vaccine rollouts, which could help casinos and other hotel and leisure companies regain demand.MGM Resorts International. Why Wynn, MGM Resorts Are Trading Higher Today. The global pandemic has been devastating to casino stocks in 2020, but optimism surrounding a COVID-19 vaccine has lifted a number of casino stocks. EVERETT, Mass., March 14, 2020 /PRNewswire/ - In consultation with the Massachusetts Gaming Commission, Encore Boston Harbor today announced that it will be closed to the public for two weeks.© Provided by The Motley Fool Why Would Anyone Want to Buy Wynn Resorts Stock?
Shares of Wynn Resorts(NASDAQ: WYNN) are up 40% over the past month and have nearly tripled from the lows hit during the broad market sell-off in March.
Investors are betting the casino industry will be soon bouncing back, and because Wynn’s operations are heavily weighted toward Macao -- the only place in China where it is legal to bet -- it could see a recovery sooner rather than later as the tiny peninsula saw a promising recovery in gaming revenue in October.
Yet for all the wagers being placed on the casino operator continuing its hot streak, here are five reasons why investors may want to hedge their bets.© Wynn Resorts Wynn Palace in Macao with fountains in the foreground. 1. Macao has a long road to recovery
Las Vegas Sands is reportedly considering selling its Las Vegas properties to go all in on Asia, primarily Macao, but for the time being, Wynn Resorts has more exposure to the market as it derives about three quarters of its adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) from the city. Popular Searches
Macao did see a spike in gambling in October, but gross gaming revenue (GGR) was still down 72.5% year over year. While that’s much better than the 90% or greater declines it had been experiencing during the pandemic, this gain was driven by the national Golden Week holiday that brought more gamblers into the city.
Analysts initially thought conditions would continue to improve, and November would see GGR decline in the 60% range, but instead, the gains have stalled, and gaming revenue last month was again down 70.5% from the previous year. 2. Too exposed to the VIP market
High rollers have long been the mainstay of the Macao casino industry, but the premium mass and mass-market gaming crowds are quickly becoming the priority. Unfortunately, Wynn Resorts still relies most heavily on the VIP crowd, and in its third-quarter report, the company noted, ’VIP table games win as a percentage of turnover was 1.04%, below the [Wynn Palace’s] expected range of 2.7% to 3.0% and below the 3.19% experienced in the third quarter of 2019.’ However, at Wynn Macau, the VIP win was 3.95%, above the expected range and the prior year’s result too.
China is also cracking down on junket operators who shuffle VIP gamblers to casinos in foreign markets. While that should help Macao properties, the high rollers really don’t want to be in the spotlight and may choose to lie low as they did the last time Beijing cracked down on junkets.
Wynn did say its mass market table drop, or the amount of money gamblers were betting, was at roughly 40% of its pre-COVID-19 levels, while its junket operations had come back to between just 25% to 30%. But that could indicate an overall weakness going forward rather than its business tilting toward more of a mass audience. 3. Las Vegas is poised to crash again
Just as Las Vegas looked like it was getting back its sea legs, albeit within the parameters of the new social order imposed by the pandemic, the state of Nevada is prepared to send the industry into a tailspin again.
State officials cut capacity limits going into the Thanksgiving holiday, going from 50% down to 25% with the hope that it will be for just three weeks, much as when the pandemic began, and many believed closing the economy for two weeks would be sufficient time to prevent a major outbreak. Eight months later, and businesses are only just recovering.
The Wynn Encore on the Las Vegas Strip has been already operating at reduced levels, closing three days a week because of decreased demand, and it now faces further restrictions, which will prolong the hoped-for recovery.4. Late to the sports-betting game
If there’s been one bright spot in gambling during the pandemic, it has been sports betting, particularly online wagering. Wynn Resorts, however, has lagged its rivals and only just got up and running with internet and sports wagering in New Jersey, which has become the sports-betting capital of the country.
Wynn had hoped to make up for lost time by partnering with Sinclair Broadcasting on its regional sports TV networks but lost out to Bally’s, owned by Caesars Entertainment, which will use the opportunity to rebrand the Sinclair networks with its own name and try to attract people to its sports-betting platform.5. Unknown knowns
The license-renewal process for casinos is still a wildcard. Although existing operators are expected to win their concessions back if and when regulators start the process, the concession awards may see more local operators allowed into the currently limited sphere of influence.
Also, Wynn Resorts co-founder Elaine Wynn was just forced out of all management ties with the casino because of its age policies. With both her and her former husband Steve Wynn now gone from the picture, it’s the passing of an era for two visionary leaders of the industry.Long odds
I’m still confident in the long-term growth of Wynn Resorts, but the casino operator has come very far, very fast, suggesting investors are betting a return to normalcy is right around the corner. Although there’s reason to hope for further gains -- eventually -- and that consumers will flock to to casinos once more, there are a lot of headwinds Wynn and the industry still face in the months ahead.
Because Wynn is a world-class operator with a long track record, I don’t see it going away, but I would not be putting all my chips on this stock right now.
Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. SPONSORED:
10 stocks we like better than Wynn Resorts
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now.. and Wynn Resorts wasn’t one of them! That’s right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 20, 2020
Updated on September 14th, 2020 by Bob Ciura
As the saying goes, the house always wins. Casinos operate strong business models, as casinos earn a virtually guaranteed profit from the sum of the bets they receive. The relatively attractive economics of casinos make the industry worthy of a closer look.
Investors may be particularly intrigued by the earnings growth and dividends of the major casino stocks. The 4 major publicly-traded casino stocks all pay dividends to shareholders, but they are far from the safest dividend stocks around.
If you are looking for a safer basket of dividend growth stocks, consider the Dividend Aristocrats. They are an elite group of 65 stocks in the S&P 500 Index with 25+ years of rising dividends.
You can download an Excel spreadsheet of all 65 Dividend Aristocrats (with important financial metrics such as dividend yields, P/E ratios, and dividend payout ratios) by clicking the link below:
Click here to download your Dividend Aristocrats Excel Spreadsheet List now.
Casinos are not without a fair amount of risk. Casinos are highly vulnerable to recessions, as consumers typically cut back heavily on gaming when the economy enters a downturn. The four major casino stocks saw their earnings collapse during the Great Recession. A similar impact has taken place to start 2020 due to the coronavirus crisis, which has battered the casino industry.Encore Casino Stock Market
We have analyzed the major casino stocks in the Sure Analysis Research Database, which ranks stocks based upon the combination of their dividend yield, earnings-per-share growth potential and valuation to compute expected total returns. In this article, we will compare the expected 5-year total annual returns of the four major casino stocks.Encore Casino StockTable Of Contents
For this article, stocks are ranked in order of least attractive to most attractive. While 5-year expected returns are incorporated in the rankings, we have also utilized a qualitative screen based on balance sheet strength and overall business quality.
You can instantly jump to a particular section of the article using the links below:Casino Industry Overview
The casino industry is in severe distress right now. The spreading coronavirus and resulting global recession have taken their toll on the casino stocks. The large U.S. casinos are heavily reliant on Macau, the largest gaming market in the world and the only market in China where casinos are legal. As a result, these stocks are very sensitive to any developments that affect the gaming activity in Macau.
This was a significant concern several years ago. In 2014, China initiated an anti-corruption regulatory crackdown, which greatly reduced the gaming activity in the area. Fortunately for the casinos, the downturn lasted for approximately two years and gaming activity in Macau recovered thereafter. Then the gaming activity in Macau faced another headwind, namely the trade war between the U.S. and China.
This headwind lasted for only about a year but now Macau is facing its strongest challenge ever, the outbreak of coronavirus, which has caused a huge hit in the gaming business. Casinos were shut down for an extended period due to the coronavirus. Visa restrictions have also added to the decline in gaming activity in Macau.
As a result, gross gaming revenue in Macau plunged 94.5% in August, compared with the same month last year. Gross gaming revenue in Macau declined 81.6% through the first eight months of 2020. The high sensitivity of casino stocks to all the developments related to China and their pronounced cyclicality means that investors should pick casino stocks carefully.Top Casino Stock #4: Wynn Resorts (WYNN)
Wynn Resorts owns and operates Wynn Macau and the Wynn Palace in Macau, as well as Wynn Las Vegas and Encore in Las Vegas. Since Wynn Resorts is highly leveraged to the gaming activity in Macau, it saw its earnings collapse and it cut its dividend by 62% in 2015-2016 due to the Macau downturn that was caused by the anti-corruption regulatory crackdown in the area. But as Macau strongly recovered in the last three years, Wynn Resorts returned to growth.
Unfortunately, the company is now facing the headwind of coronavirus in all the regions in which it operates. Wynn Resorts reported earnings results for the second quarter on 8/4/2020. Revenue declined 95% year-over-year to $85.7 million, which was $190 million less than expected. The company lost $6.14 per share in the quarter, missing estimates by $1.23. Adjusted property EBITDA was a loss of $322.9 million compared to estimates of a loss of $314 million. This compared unfavorably to adjusted EBITDA of $480.6 million in the second quarter of 2019.
Results for Wynn Resorts were once again severely impacted by the COVID-19 pandemic as properties in Macau were closed for 15 days. Las Vegas operations didn’t open until June 4th.Wynn Palace revenues declined 98.6% as a result. Revenues for Wynn Macau decreased 97.8% while Las Vegas decreased 86% year-over-year. Wynn Resorts suspended its dividend in an effort to conserve capital. Consensus estimates call for a loss of $11.52 per share for 2020.
On the bright side, casinos are gradually reopening, and Wynn Resorts seems to have ample room to grow in the upcoming years thanks to its promising growth pipeline.Wynn Encore Stock
Source: Investor Presentation
The company has made progress in the design of Crystal Pavilion in Macau, which will be a major tourist attraction. In addition, Encore Boston Harbor opened in June-2019 and has exhibited strong performance so far so it has promising growth prospects ahead thanks to expected ramp-up in activity.
Moreover, the company has been caught off guard, with total current and long-term debt outstanding of $12.78 billion and cash and cash equivalents of $3.80 billion. Therefore, the stock is carrying an increased amount of risk right now due to its high level of debt.
However, we believe that the coronavirus crisis will not last beyond this year and we view the long-term growth prospects of the company as intact. We expect 4% annual EPS growth through 2025. Using the company’s current assets, return on assets of 5.6% over the last decade and share count, we believe Wynn Resorts has earnings power of $1.89. We will use this figure to calculate fair value and projected return.
Based off of the earnings power estimate for 2020, the stock is currently trading at a P/E ratio of 44, which is higher than its historical average of 30.1. However, the stock traded at abnormally high P/E ratios in some years due to depressed earnings in those years.
The best poker chip set for home games is MRC Laurel Crown Poker Set, with its premium ceramic build. You can also opt for RINCO Plastic Chips if you only need basic chips for your games. Brybelly Diamond Poker Set and Trademark Poker Set are two other great options that you can use for home games. The best poker chip sets come with everything you need to get started, including dealer buttons and decks of cards. Some sets even come with plaques to represent excessively large amounts of winnings. Trademark Poker Maverick Chip set is one of the best poker chip sets you can buy right now. This is the best in class for the price it offers. You will find really high quality chips which offers a feel similar to an authentic casino-quality clay poker chips. You get an aluminium case along with the poker chips. The best ceramic poker chips for home games are: MRC 500pcs Laurel Crown Ceramic Poker Chips Set with Aluminum Case 500pcs Laurel Crown Ceramic Poker Chips Set Wood CASE Custom Build by MRC. If you’re on the market for a new set, here are some of the best poker chip sets of 2019: Fat Cat, 11.5 grams, 500-count This poker chip set from Fat Cat comes with everything you need to host a game at home. It includes 500 Claytec 11.5 gram poker chips. Best poker chips for home.
For instance, the abnormally rich valuation of the stock during 2015-2017 resulted from the market’s view that the downturn in Macau was temporary. Our target P/E ratio of 18 reflects uncertainty regarding Macau and the coronavirus. If shares reverted to our target P/E by 2025, then valuation would be a 16% headwind to annual returns over this time period.
If the stock reaches our fair valuation level over the next five years, it would reduce shareholder returns by 16%, effectively wiping out earnings growth and dividends over that time period. The stock is markedly volatile due to its high debt load, which is an added risk factor.
As a result, only those who can stomach extreme stock price volatility and have confidence in the ability of Wynn Resorts to navigate through the current crisis should consider buying the stock.Top Casino Stock #3: MGM Resorts (MGM)
MGM Resorts owns and operates casinos, hotels and conference halls in the U.S. and China. The company has the least exposure to Macau in this group of stocks. As a result, it suffered much less than its peers from the trade war between the U.S. and China and the protests of people in Macau a few months ago.
However, the company is highly exposed to the outbreak of coronavirus, just like its peers. Due to the rapid spread of the coronavirus, MGM Resorts suspended all its casino operations in Las Vegas on March 16th and did not accept hotel reservations for the dates prior to May 1st. The company also closed its casino in Maryland.
In late July, MGM Resorts reported (7/30/20) financial results for the second quarter of fiscal 2020. The company began reopening its U.S.properties in the quarter but its revenue plunged -91% over last year’s quarter due to the suspension of the operations of the company in the U.S. and a collapse in gaming revenues in Macau caused by travel restrictions and social distancing.
Source: Investor Presentation
As a result, MGM Resorts switched from a profit of $0.23 per share in last year’s quarter to an adjusted loss of -$1.52 per share.
Due to the unprecedented downturn that has resulted from the pandemic, MGM Resorts cut its dividend by 98% in April. Moreover, in May, it issued $750 million of 5-year bonds at 6.750%. The high interest rate reflects the desperation of the company for funds and the high debt load of the company. Net debt is $20.0 billion, which is nearly twice the current market cap of the stock.
On the positive side, on August 20th, 2020, IAC (IAC) reported a 12% stake in MGM Resorts for approximately $1 billion. IAC has a portfolio of brands and digital expertise, which is expected to help MGM Resorts leverage its digital assets. IAC will join the Board of Directors of MGM Resorts. The stock jumped 12% on the announcement.
Nevertheless, due to the headwind of coronavirus, along with a huge debt load, shareholders should not expect a material boost in dividends and share repurchases for the foreseeable future. That said, the company has a positive long-term outlook for conventions and sports betting in the domestic market, as well as the ramp-up of the recently-built MGM Cotai resort, MGM Springfield, and Park MGM.
As soon as the coronavirus crisis comes to an end, MGM Resorts will benefit from these growth drivers. The company will also enhance its earnings growth via its initiative “MGM 2020”, which aims to expand margins by reducing operating costs and enhancing the efficiency of the company.
Due to the headwind from coronavirus, we expect MGM Resorts to report a net loss in 2020. Earnings-per-share are expected to gradually turn positive, with expected annual growth of 5% through 2025. After the massive dividend reduction,
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