The global economic backdrop has been lackluster in 2011, but business in the casino industry has continued to hum along. Most of the major players have experienced slightly positive growth in the U.S., but have been looking to Macau, China for their big money. Here is a rundown of the year in casino stocks.

Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

Macau Madness
Las Vegas Sands (NYSE:LVS) has been having a remarkable year on a fundamental basis, and it recently announced a record quarter that included a 61.8% year-over-year improvement in adjusted diluted earnings per share on a 26.2% pop in net revenue. In the third quarter, the company's Macau business segment accounted for slightly more than half of its total operating income. LVS' share prices have fallen 4.3% since the beginning of the year. (To know more about EPS, read How To Evaluate The Quality Of EPS.)

MGM Resorts International (NYSE:MGM) began consolidating MGM China this past summer and this segment of the company's operations has been heating up. MGM China has seen its cash flow, before branding fees, increase approximately 80% on a year-over-year basis. With $13.6 billion in debt, MGM is looking for improving cash flow metrics so that it can shore up its balance sheet. Investors have remained skeptical and have pushed the stock 32.5% lower year to date.

Another heavy-hitter that has been raking in revenue from its Macau operations is Wynn Resorts (Nasdaq:WYNN). Net revenue for the company's third quarter spiked 30% over the year-ago quarter with the majority of the advance driven by Wynn Macau. Shares of WYNN are up 13% year to date.

High Stakes
Although it does not have operations overseas, Penn National Gaming (Nasdaq:PENN) has been able to churn out double-digit revenue growth for much of 2011. The company's results have benefited from the acquisition of M Resort in Las Vegas as well as the opening of its Hollywood Casino Perryville facility last fall. PENN shares are up 2.7% year to date. (To know more about acquisitions, read Analyzing An Acquisition Announcement.)

Ameristar Casinos (Nasdaq:ASCA) has been posting slightly positive net revenue and adjusted EBITDA growth this year. This trend has held up for each of the last four quarters, and margins have been on the rise. The company has succeeded in keeping operating costs in check and cutting back on promotional allowances. Shares of ASCA have risen 18.2% in 2011.

It has been a rough year for shareholders of Boyd Gaming (NYSE:BYD). The casino operator issued fourth quarter EBITDA guidance that was below analysts' estimates. Boyd's revenue growth has been flat in 2011 and its $2.8 billion debt has been a cause for concern among analysts. BYD shares have tanked to the tune of 40% so far this year.

The Bottom Line
2011 has brought a mixed bag of developments for the casino and gaming industry. Companies with exposure to Macau have been reaping major top line gains. There has been year-over-year growth in the U.S., but the advances have been harder to come by given an already saturated market. The sector, as a whole, should be able to carry its positive momentum well into next year, and players with operations in Asia will cash in on this upside potential.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Billy Fisher did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Stock Analysis

    Will J.C. Penney Come Back in 2016? (JCP)

    J.C. Penney is without a doubt turning itself around, but that doesn't guarantee the stock will respond immediately.
  2. Mutual Funds & ETFs

    Should Investors Take a BITE Out of This New ETF?

    ETF BITE offers a full menu of restaurants. Is now the right time to invest?
  3. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  4. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  5. Investing

    Playing The Decline of Traditional Broadcast Media

    Broadcast media is losing viewership as cord cutting by the younger generation triggers subscription losses at cable and satellite companies.
  6. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  7. Wealth Management

    Importance of Title in Art Transactions

    A work of art can be a valuable investment, but it’s important to verify that it isn’t stolen property when you purchase it.
  8. Brokers

    The Next Industries Bound to be Uberized

    As more startups succeed with the sharing economy business model, investors seek out businesses poised to disrupt their industries like Uber.
  9. Economics

    Is Wall Street Living in Denial?

    Will remaining calm and staying long present significant risks to your investment health?
  10. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center