15 Best Casino Stocks to Invest In
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In this article we presented the 15 best casino stocks to invest in. You can skip our detailed discussion on these companies, and go directly to the 5 Best Casino Stocks to Invest In.
Despite getting clobbered in 2020 amid the coronavirus pandemic, the casino industry is set to grow in the coming years on the back of an increasing interest of average Americans in gaming, online gambling and a broader economic recovery.
According to a report published by Research and Markets, the global gambling market is expected to grow at a CAGR of 10.8% at $516.03 billion in 2021. The growth is attributed to the resumption of operations in casinos and other gaming/betting companies after Covid-19 restrictions. According to the Las Vegas Convention and Visitors Authority, over 2.8 million people visited Las Vegas in May, presenting an 11.8% growth from April. The hotel occupancy also surged to 70.9% in May.
The U.S. has over 2,100 casinos, most of which are located in Nevada. The state is home to some of the famous casino companies such as Caesars Entertainment, Inc. (NASDAQ: CZR), Las Vegas Sands Corp. (NYSE: LVS), and MGM Resorts International (NYSE: MGM). The gaming revenue in the U.S. also surged as tourism resumed and casinos started to show strong signs of recovery. According to American Gaming Association, in the first quarter of 2021, the gross gaming revenue stood at $11.1 billion, with slot machines generating over $6.7 billion. Some of the major casino companies in the U.S. bounced back stronger from the Covid-19 crisis.
For example, one of the leading global entertainment companies, MGM Resorts International (NYSE: MGM) generated over $1.6 billion in revenue in the first quarter, $545 million of which was generated by Las Vegas Strip Resorts. Other companies like Wynn Resorts, Limited (NASDAQ: WYNN), Boyd Gaming Corporation (NYSE: BYD), and Churchill Downs Incorporated (NASDAQ: CHDN) also grew their revenues due to the resumption of activities, drawing the attention of investors. In May 2021, the casinos in Las Vegas hit $1.2 billion in gaming wins, breaking October 2007’s single-month record of $1.16 billion.
Macau, China, also remained a hot spot for casino-centric games in 2021. In May, Macau’s gross gaming revenue surged 492% to $1.3 billion, beating the expectations of the analysts. The revenue saw a 24% growth from the previous month but still has to meet the 2019 levels. Some famous stocks in the Macau gaming space include Las Vegas Sands Corp. (NYSE: LVS), Wynn Resorts, Limited (NASDAQ: WYNN), and MGM Resorts International (NYSE: MGM).
The Rise of Digital Gambling
As the casino and gambling industries have undergone numerous changes over the past years, the contemporary world also calls for digital innovation, strengthened massively by the pandemic. iGaming, also known as sports betting, is increasingly gaining the attention of people because it offers a wide choice of casinos, less crowding, affordable prices, all with comfort and convenience. In the U.S., states such as Delaware, Michigan, New Jersey, and Indiana have seen escalating iGaming revenues. In March 2021, the iGaming revenue in Michigan reached $127.4 million.
Overall, in Q1 2021, the sports betting sector generated over $961 million, up 270% year-over-year, according to American Gaming Association. Some major casino companies have also joined the path of digital innovation. For example, Penn National Gaming, Inc. (NASDAQ: PENN) reported over 183k app downloads in Q1. Similarly, the gaming business at Golden Entertainment, Inc. (NASDAQ: GDEN) accounted for 20% of the company’s gross revenue.
In May, BofA mentioned that Penn National Gaming, Inc. (NASDAQ: PENN), Boyd Gaming Corporation (NYSE: BYD), and Churchill Downs Incorporated (NASDAQ: CHDN) are some of the most lucrative opportunities for investors in the gaming sector due to positive cash flows.
Photo by Michal Dolnik on Unsplash
With this context in mind, let’s start our list of the 15 best casino stocks to invest in. The stocks are added to the list on the basis of hedge fund sentiment, analysts’ ratings, and fundamentals.
Best Casino Stocks to Invest In
15. Century Casinos, Inc. (NASDAQ: CNTY)
Number of Hedge Fund Holders: 11
Century Casinos, Inc. (NASDAQ: CNTY) is a North American casino-entertainment company founded in 1992. It operates eleven casinos in Missouri, Alberta, West Virginia, Colorado, as well as Canada, and Poland. The company’s partners, Rush Street Interactive and William Hill, have recently launched their online casino platforms.
In Q1 2021, Century Casinos, Inc. (NASDAQ: CNTY) generated a revenue of over $72 million, beating the estimate by $5.79 million. The casinos in the U.S. accounted for $64.4 million of the gross revenue and Poland’s casinos generated over $22 million. The company also beats the EPS by $01.10. The CNTY stock hit an all-time low in March 2020 due to the global market crash but has rebounded, soaring 111% year to date and 257.3% in the past year.
Earlier in April, Union gaming raised its price target on CNTY to $15, rating it as a ‘Buy’. In the same month, B. Riley also initiated coverage on CNTY stock with an $18 price target and a Buy rating.
As of the first quarter of 2021, 11 hedge funds tracked by Insider Monkey have positions in Century Casinos, Inc. (NASDAQ: CNTY), worth $43.2 million.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Century Casinos, Inc. (NASDAQ: CNTY) is one of the best casino stocks to invest in.
14. Bally's Corporation (NYSE: BALY)
Number of Hedge Fund Holders: 18
Bally's Corporation (NYSE: BALY) is a gaming and casino entertainment company with headquarters in Providence, Rhode Island. The company has 10 casinos, located across 10 U.S. states and also owns a horse racetrack. It is one of the most famous gaming and betting spots for tourists, acquiring over 15,000 slot machines and 465 table games. The company is also expanding its sports betting and iGaming services in the U.S. BALY ranks fourteenth on our list of the best casino stocks to invest in.
In Q1 2021, Bally's Corporation (NYSE: BALY) reported a net income of $10.7 million, up from $8.8 million during the same period last year. The revenue grew tremendously by 76% year-over-year at $192.2 million. The EPS for the quarter stood at $0.28, in-line with the market consensus.
The gaming segment accounted for over $152 million of the gross revenue. The company invested 386,000 in acquiring sports betting and iGaming licenses in various jurisdictions. Recently in June, Bally's Corporation (NYSE: BALY) acquired betting technology provider Bet.com, in a $125 million deal. The BALY stock soared by 158% in the past year and 11.8% year to date. BALY's price target was also raised by Stifel to $81, with a ‘Buy’ rating, in June.
At the end of Q1 2021, 18 hedge funds tracked by Insider Monkey have positions in Bally's Corporation (NYSE: BALY), worth $415 million.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Bally's Corporation (NYSE: BALY) is one of the best casino stocks to invest in.
13. Golden Entertainment, Inc. (NASDAQ: GDEN)
Number of Hedge Fund Holders: 18
Golden Entertainment, Inc. (NASDAQ: GDEN) is one of the leading American gaming and casino companies based in Las Vegas, Nevada. The company owns ten casino resorts in Nevada and Maryland. It is the largest gaming operator in the U.S., operating over 10,000 gaming devices across the country. Golden Entertainment, Inc. (NASDAQ: GDEN) was founded in 2001. GDEN ranks thirteenth on our list of the best casino stocks to invest in.
In Q1 2021, Golden Entertainment, Inc. (NASDAQ: GDEN) generated over $239.6 million in revenue, up from $207 million in the prior-year quarter, presenting a 15.7% year-over-year growth. The EPS also beat the market consensus by $0.54 at $0.35. The gaming segment accounted for $177 million of the gross revenue. Having seen an all-time low in March 2020, the GDEN stock has bounced back, with shares gaining 135.7% year to date and 459.1% in the past year. Union Gaming raised its price target on GDEN stock to $45 due to strong results, mainly driven by the gaming business. The GDEN has also been considered a value play in the casino industry by the firm.
In Q1 2021, the number of hedge funds having positions in Golden Entertainment, Inc. (NASDAQ: GDEN) increased to 18 from 13 in the previous quarter. The total value of these stakes is $142.2 million. With 1.3 million shares worth $33.1 million, Hill Path Capital is the largest shareholder of the company.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Golden Entertainment, Inc. (NASDAQ: GDEN) is one of the best casino stocks to invest in.
12. Churchill Downs Incorporated (NASDAQ: CHDN)
Number of Hedge Fund Holders: 19
Churchill Downs Incorporated (NASDAQ: CHDN) is one of the oldest racetracks in the world. It is widely known for hosting the annual Kentucky Derby. The racetrack is spread over 147 acres, accommodating more than 5,000 horses every year. Along with this, the company also owns over 16 casinos and racing properties in the U.S. CHDN ranks twelfth on our list of the best casino stocks to invest in.
In Q1 2021, Churchill Downs Incorporated (NASDAQ: CHDN) reported strong earnings driven both by horse racing and gaming businesses. The company recorded a net income of $34.6 million, up from $2 million in the prior-year quarter. In the gaming segment, Derby City Gaming accounted for $32.9 million of the gross revenue and Twin Spires generated $93 million in the horse racing segment. The EPS for the quarter is recorded at $0.91, beating the market estimate by $0.35. In Q1, the company also paid over $217 million to shareholders through dividends and shares repurchase. The CHDN stock has delivered a 51.6% return to shareholders in the past year.
In June, Macquarie initiated coverage on CHDN stock with an ‘Outperform’ rating. The firm believes that CHDN can benefit from historical racing machines.
At the end of Q1 2021, 19 hedge funds tracked by Insider Monkey have positions in Churchill Downs Incorporated (NASDAQ: CHDN), worth $413 million. Nitorum Capital is the biggest shareholder of the company with shares worth $198.4 million.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Churchill Downs Incorporated (NASDAQ: CHDN) is one of the best casino stocks to invest in.
11. Full House Resorts, Inc. (NASDAQ: FLL)
Number of Hedge Fund Holders: 21
Full House Resorts, Inc. (NASDAQ: FLL) is the Nevada-based casino operator and owner. The company also manages hospitality and entertainment facilities in the U.S. Along with Las Vegas, it also owns casinos in Mississippi, Colorado, and Indiana. Investors have been eyeing FLL due to the ramped-up construction process, expecting to grow its revenue this year. FLL ranks eleventh on our list of the best casino stocks to invest in.
In Q1 2021, Full House Resorts, Inc. (NASDAQ: FLL) generated a revenue of $42 million, up from $30.9 million in the prior-year period, showing a 36.8% increase. The casino segment accounted for $32 million of the gross revenue. Since the beginning of the year, the FLL stock has delivered a 138.7% return to the shareholders. In the past year, the FLL soared tremendously by 621%, reaching a new high of $11.26 in May. Recently, Macquarie raised its price target on FLL stock to $10.
Hedge funds are turning bullish on Full House Resorts, Inc. (NASDAQ: FLL), as 21 funds have stakes in the company in Q1, compared with 10 in the previous quarter. With 1.3 million shares worth $11.3 million, Driehaus Capital is the biggest shareholder of the company.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Full House Resorts, Inc. (NASDAQ: FLL) is one of the best casino stocks to invest in.
10. Boyd Gaming Corporation (NYSE: BYD)
Number of Hedge Fund Holders: 22
Boyd Gaming Corporation (NYSE: BYD) is one of the leading casino companies in America and was founded in 1975. The company owns over 28 gaming properties in 10 states, including Nevada, Indiana, Kansas, Ohio, etc. It has recently partnered with Hawaiian Airlines to launch a loyalty program for consumers to earn benefits and rewards. BYD stands tenth on our list of the best casino stocks to invest in.
In Q1 2021, Boyd Gaming Corporation (NYSE: BYD) reported a net income of $105 million, up from $2.4 million during the same period last year. The EPS for the quarter stood at $0.93, beating the market estimate by $0.49. The company generated a revenue of $753 million, compared with $680 million in Q1 2020. The gaming segment accounted for $618 million of the gross revenue and accommodation generated over $25 million. The BYD stock has gained over $204% in the past year and 32.9% year to date. BYD has also been upgraded by BofA to 'Buy', becoming the investment bank’s one of the top choices in the gaming segment, along with Penn National Gaming, Inc. (NASDAQ: PENN) and Churchill Downs Incorporated (NASDAQ: CHDN). Truist also raised the price target on the BYD stock from $65 to $78, with a 'Buy' rating.
At the end of Q1 2021, 22 hedge funds tracked by Insider Monkey have positions in Boyd Gaming Corporation (NYSE: BYD), worth $299 million. Melvin Capital Management is the leading shareholder of the company with 1.3 million shares, worth $76.6 million.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Boyd Gaming Corporation (NYSE: BYD) is one of the best casino stocks to invest in.
9. Red Rock Resorts, Inc. (NASDAQ: RRR)
Number of Hedge Fund Holders: 28
Red Rock Resorts, Inc. (NASDAQ: RRR) is a hotel and casino company, based in the suburb of Las Vegas, Nevada. The company is owned by Station Casinos and it is its flagship property. RRR is ninth on our list of the best casino stocks to invest in. It is best known for its award-winning accommodations and unparalleled casino experience.
In Q1 2021, Red Rock Resorts, Inc. (NASDAQ: RRR) generated over 352.6 million in revenues, beating the market consensus by $19.2 million. The revenue from the Las Vegas operations stood at $343 million. The casinos accounted for $259.9 million of the gross revenue and accommodation generated nearly $22 million. The RRR stock has performed tremendously in the past year, soaring 70% year to date and 314% in the past year. Due to the strong quarter and growth prospects, the price target on the RRR stock is lifted by many investment banks, such as JP Morgan, Truist, and KeyBanc. JP Morgan maintains an ‘Overweight’ rating on RRR because of the company’s strong position in the local Las Vegas casino market.
As of Q1 2021, 28 hedge funds tracked by Insider Monkey have stakes in Red Rock Resorts, Inc. (NASDAQ: RRR), up from 26 in the previous quarter. Eminence Capital is the leading shareholder of the company with 6.4 million shares, worth $209.3 million.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Red Rock Resorts, Inc. (NASDAQ: RRR) is one of the best casino stocks to invest in.
Diamond Hill Capital, an investment management firm, released its Q1 2021 investor letter and mentioned Red Rock Resorts, Inc. (NASDAQ: RRR) and other stocks in it. Here is what the firm has to say:
“Red Rock Resorts was another top contributor in Q1, as it has been since the pandemic-related market bottom in March 2020. Red Rock controls over half the Las Vegas locals market, where government legislation restricting greenfield development has effectively created a duopoly. Through a tough operating environment, management has meticulously controlled costs and improved the balance sheet and is delivering record margins. We believe there is tremendous pent-up demand waiting to be released amid post-pandemic reopening—on top of favorable conditions for economic expansion in Las Vegas, including an attractive tax environment driving in-migration.”
8. Melco Resorts & Entertainment Limited (NASDAQ: MLCO)
Number of Hedge Fund Holders: 29
Melco Resorts & Entertainment Limited (NASDAQ: MLCO) is a Hong Kong-based entertainment company with integrated resorts and casino gaming facilities. The company has resorts located in Asia and Europe. The company was founded in 2004 and currently employs over 21,000 people. Its Hollywood-themed Studio City is one of the most famous tourist attractions in Macau. Melco Resorts & Entertainment Limited (NASDAQ: MLCO) reported a 64% increase in gross gaming revenue in the past 7 years. MLCO stands eighth on our list of the best casino stocks to invest in.
In Q1 2021, Melco Resorts & Entertainment Limited (NASDAQ: MLCO) generated a revenue of $518.9 million. The casino segment accounted for $433.7 million of the gross revenue, whereas the accommodation and food segments generated $39.6 and $26 million, respectively. The company has returned approximately $3.4 billion to shareholders through dividends and share repurchases. Recently in June, the company's board has also approved a $500 million share repurchase program. Citigroup rated the MLCO stock as a ‘Buy’ and expects an improvement in EBITDA among the Macau gaming operators in the second quarter. MLCO has also been upgraded to 'Buy' at CLSA recently.
As of Q1 2021, 29 hedge funds tracked by Insider Monkey have positions in Melco Resorts & Entertainment Limited (NASDAQ: MLCO), worth $728 million. With 6.2 million shares, worth $123.9 million, Broad Peak Investment Holdings is the biggest shareholder of the company.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Melco Resorts & Entertainment Limited (NASDAQ: MLCO) is one of the best casino stocks to invest in.
7. International Game Technology (NYSE: IGT)
Number of Hedge Fund Holders: 37
International Game Technology (NYSE: IGT) is a leading company that deals in the production of slot machines and other gambling technology. The company has offices in Rome, Rhode Island, Providence, and Las Vegas and is headquartered in London. It also offers lotteries and interactive/social gaming. IGT stands seventh on our list of the best casino stocks to invest in.
In Q1 2021, International Game Technology (NYSE: IGT) generated a revenue of $1.01 billion, up from $814 million, showing 25% year-over-year growth. The EPS for the quarter stood at $1.18, beating the market consensus of $0.09. The company saw a growth in business after the government lifted the Covid-19 restrictions.
In Q1, 31% growth was recorded in overall lottery sales, accounting for $749 million of the gross revenue, with a 52% growth in Italy. Digital and betting revenue were also up 85% as the company’s iGaming segment maintains over approximately 30% share of the U.S. market. The IGT stock also gained over 137.5% in the past year. After the strong results, many investment banks have raised their price targets on the IGT stock, such as Credit Suisse and Deutsche Bank. Truist also raised its price target on IGT to $32, with a 'Buy' rating.
As of Q1 2021, we see that hedge funds are turning bullish on International Game Technology (NYSE: IGT), as 37 hedge funds have positions in the company, compared with 25 in the previous quarter. With 2.7 million shares, worth $44.3 million, Renaissance Technologies is the leading shareholder in the company.
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), International Game Technology (NYSE: IGT) is one of the best casino stocks to invest in.
6. Penn National Gaming, Inc. (NASDAQ: PENN)
Number of Hedge Fund Holders: 42
Penn National Gaming, Inc. (NASDAQ: PENN) is an American company of casinos and racetracks. The company has over 44 facilities located in 19 states across the U.S. and Canada, operating under the Hollywood Casino brand. PENN ranks sixth on our list of the best casino stocks to invest in. The company is also an operator of live sports betting, with Indiana recently becoming the fourth state for its online sports betting market.
In Q1 2021, Penn National Gaming, Inc. (NASDAQ: PENN) reported strong earnings, beating the market consensus. The company generated a revenue of $1.27 billion, up from $1.1 billion during the same period last year, presenting 13% year-over-year growth. The EPS stood at $0.55, beating the market estimate by $0.27. The numbers are driven by the gaming segment which accounted for over $1.08 billion of the total revenue. The PENN stock has soared by 141% in the past year. Earlier in May, BofA rated PENN as a ‘Buy’ because of the positive margin outlook. In April, Needham initiated its coverage on PENN with a 'Buy' rating.
As of Q1 2021, 42 hedge funds tracked by Insider Monkey have positions in Penn National Gaming, Inc. (NASDAQ: PENN), compared with 41 in the previous quarter. With 2.3 million shares, worth $249 million, Whale Rock Capital Management is the largest shareholder of the company.
Barron Growth Fund recently released its Q1 2021 investor letter and mentioned Penn National Gaming, Inc. (NASDAQ: PENN) in it. Here is what the firm has to say:
“Shares of regional casino operation Penn National Gaming, Inc. increased in the quarter on strong share gains in the online sports betting and gaming markets in Michigan and the opening of the large Illinois online sports betting market. Strong sequential growth in revenue and sustained margin improvement in its brick and mortar operations also helped boost the share price. We think these positive developments will lead to improvements in the company’s balance sheet and its EBITDA to free cash flow conversion.”
Like Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Caesars Entertainment, Inc. (NASDAQ: CZR), Boyd Gaming Corporation (NYSE: BYD), DraftKings Inc. (NASDAQ: DKNG), and Wynn Resorts, Limited (NASDAQ: WYNN), Penn National Gaming, Inc. (NASDAQ: PENN) is one of the best casino stocks to invest in.
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Disclosure: None. 15 Best Casino Companies to Invest In is originally published on Insider Monkey.