Most casino stocks have been on a tear over the past year. These are high-beta stocks, which increases risk, but investors love to take on risk when interest rates are low. While stocks have run higher, three of the following four casino stocks suffered revenue declines in their last fiscal year: Las Vegas Sands Corp. (LVS), MGM Resorts International (MGM), Wynn Resorts Ltd. (WYNN), and Penn National Gaming Inc. (PENN).

Many United States consumers have become more cautious with their money, especially the middle class. When interest rates are low and the economy is uncertain, many corporations allocate capital to buybacks and dividends, not organic growth. That, in turn, means fewer high-paying jobs being available, which then leads to reduced discretionary income. However, it’s not all bad news for the casino companies. Many domestic consumers have been using credit to spend, and international consumers have been helping fuel growth. The latter has slowed, but the industry now largely depends on China.

Over the long haul, China should bounce back and see exponential growth again, especially since the Chinese government has reversed the one-child policy. Unfortunately for the casino companies, this will take many years to play out. Furthermore, the Chinese economy is overleveraged right now. It has the potential to keep moving higher, but it’s not sustainable. A correction appears to be imminent. This would not help the casino companies or their stocks.

In the meantime, with interest rates low (and even negative in some places) all around the world, it’s party time, and there’s no better place to party than in a casino, or, if you can’t get to the casino, with a casino stock. Let’s see how that party has been panning out for casino stocks over the past year.

The chart below will include 1-year stock performance, dividend yield, short interest, Forward price-to-earnings ratio, and beta.

 

1-Year Stock Performance

Dividend Yield

Short Interest

Forward P/E

Beta

LVS

49.93%

5.01%

3.40%

24

1.97

MGM

40.11%

N/A

4.29%

23

1.69

WYNN

89.36%

1.97%

34.67%

20

2.06

PENN

-18.77%

N/A

10.61%

14

1.72

Below are revenue and net income numbers for each of the aforementioned companies over the past three fiscal years:

LVS

FY13

FY14

FY15

Revenue

$13.77 billion

$14.58 billion

$11.69 billion

Net Income

$2.3 billion

$2.8 billion

$2.0 billion

MGM

FY13

FY14

FY15

Revenue

$9.81 billion

$10.08 billion

$9.19 billion

Net Income

-$172 million

-$150 million

-$448 million

WYNN

FY13

FY14

FY15

Revenue

$5.62 billion

$5.43 billion

$4.08 billion

Net Income

$729 million

$732 million

$195 million

PENN

FY13

FY14

FY15

Revenue

$2.78 billion

$2.59 billion

$2.84 billion

Net Income

-$581 million

-$184 million

$686 thousand