MGM Versus LVS: Which Casino Stock Is Worth The Gamble Now?
Zacks Investment Research | Nov 14, 2018 08:43PM ET
Operators of integrated casino, hotel and entertainment resorts seldom fail to build businesses as demand for casino services is relatively inelastic. This is because casinos attract a particular set of consumers whose preferences remain more or less similar in adverse market conditions.
In addition to this, the legalization of sports betting outside Nevada has widened the scope for casino operators since illegal betting is valued at billions of dollars annually in the United States. Further, casino operators are collaborating with the hospitality sector, setting up luxury hotels and generating high-margin non-gaming revenues. Subsequently, backed by discretionary spending and a stable demand for casino services, the industry is poised to witness long-term growth.
But the industry has its share of hurdles to overcome. Slowdown in Macau gaming revenues continues to be a concern for the industry in the short run. Moreover, a trade war between Beijing and Washington is hurting casino operators in Macau. Though gaming revenues from Macau increased for the 27th consecutive month in October, the growth rate has softened since the second quarter. Additionally, waning property price in China impacted the high-end VIP segment.
Against such a backdrop, leading casino companies like Wynn Resorts (NASDAQ:WYNN) , Penn National Gaming, Inc. (NASDAQ:PENN) , Las Vegas Sands Corp. (NYSE:LVS) and MGM Resorts International (NYSE:MGM) are continuously devising strategies to drive revenues and profits. In response to a rapidly evolving and dynamic market, Las Vegas Sands and MGM Resorts are capitalizing on the significant profit associated with the business. Both the companies carry a Zacks Rank #3 (Hold) and have respective market capitalization of $40.4 billion and $13.6 billion. You can seeOriginal post
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