Top Casino Stocks for Q3 2022

GDEN is top for value and growth, while PLYA is top for performance

The casino sector is one part of the broader gaming industry focused on leisure and resort properties and casino gaming activities. Companies in the sector own and operate casinos, resorts, hotels, ski facilities, and racetracks worldwide. The sector also includes companies involved in online gambling. Big-name casino companies in the sector include Las Vegas Sands Corp., Wynn Resorts Ltd., and MGM Resorts International.

The COVID-19 pandemic and related restrictions have had an adverse impact on many companies within the casino sector. However, the industry is starting to bounce back as restrictions have eased. U.S. casinos had their biggest month ever in March, pulling in a record $5.3 billion in revenue for the month. First quarter revenue also came in at a record high $14.3 billion.

The VanEck Gaming ETF (BJK), an exchange-traded fund, is used as a benchmark to gauge the performance of the casino industry. However, investors should note that it includes non-casino gambling stocks that have different investment characteristics, such as DraftKings Inc., an online sports betting company. BJK has vastly underperformed the broader market, providing investors with a total return of -36.5% compared to the -8.9% total return of the Russell 1000 Index over the past 12 months. These market performance numbers and all statistics in the tables below are as of June 10, 2022.

Here are the top three casino stocks with the best value, fastest growth, and best performance.

Best Value Casino Stocks

These are the casino stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.

Best Value Casino Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
Golden Entertainment Inc. (GDEN) 45.34 1.3 7.7
Red Rock Resorts Inc. (RRR) 37.51 2.3 8.4
MGM Resorts International (MGM) 31.78 13.5 10.3

Source: YCharts

  • Golden Entertainment Inc.: Golden Entertainment is a diversified gaming company with a portfolio of gaming assets, including casino and distributed gaming operations. It owns casinos and taverns and operates gaming devices in various locations, such as bars and pubs. The company announced in early May financial results for Q1 of its 2022 fiscal year (FY), the three-month period ended March 31, 2022. Net income rose 239.6% on revenue growth of 14.2% year over year (YOY). Golden Entertainment reported lower non-operating expenses and received a much larger income tax benefit compared to the year-ago quarter, helping to boost net income.
  • Red Rock Resorts Inc.: Red Rock Resorts is a gaming, development, and management company that owns and manages casino and entertainment properties. Besides casino gaming, it also provides entertainment venues, movie theaters, bowling, and banquet spaces.
  • MGM Resorts International: MGM Resorts International is a global entertainment company. It owns and operates hotels and casinos, and meeting and conference spaces. The company also provides theatrical entertainment, restaurants, nightlife, and a range of retail offerings. MGM announced in mid-May that it has completed its acquisition of The Cosmopolitan of Las Vegas for approximately $1.6 billion from Blackstone. The property includes over 3,000 rooms and a 110,000 square-foot casino.

Fastest Growing Casino Stocks

These are the top casino stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Casino Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Golden Entertainment Inc. (GDEN) 45.34 1.3 220.0 14.2
Hilton Grand Vacations Inc. (HGV) 43.50 5.2 N/A (see company description) 231.5
Monarch Casino & Resort Inc. (MCRI) 63.42 1.2 119.0 44.5

Source: YCharts

  • Golden Entertainment Inc.: See above for company description.
  • Hilton Grand Vacations Inc.: Hilton Grand Vacations is a global timeshare company. The company develops and operates a system of brand-name vacation ownership resorts in a range of vacation destinations, including Las Vegas. Hilton Grand Vacations reported net income of $51 million, a significant turnaround from the net loss of $7 million in the year-ago quarter. Revenue grew 231.5% YOY. Because the company's EPS went from negative in the year-ago quarter to positive in the most recent quarter, an EPS growth rate could not be calculated for the table above.
  • Monarch Casino & Resort Inc.: Monarch Casino & Resort owns and operates two hotels and casinos, one in Reno, Nevada and the other in Black Hawk, Colorado. It also owns separate parcels of land, an industrial warehouse, and a restaurant.

Casino Stocks with the Best Performance

These are the casino stocks that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at.

Casino Stocks with the Best Performance
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Playa Hotels & Resorts NV (PLYA) 8.11 1.3 7.0
Golden Entertainment Inc. (GDEN) 45.34 1.3 -0.4
Hilton Grand Vacations Inc. (HGV) 43.50 5.2 -6.2
Russell 1000 N/A N/A -8.9
VanEck Gaming ETF (BJK) N/A N/A -36.5

Source: YCharts

  • Playa Hotels & Resorts NV: Playa Hotels & Resorts is a Netherlands-based company that owns, operates, and develops all-inclusive resorts throughout Mexico and the Caribbean. It offers lodging, dining, entertainment, and other hospitality services. The company announced in early May financial results for Q1 FY 2022, which ended March 31, 2022. Playa Hotels & Resorts reported net income of $42.7 million, a significant improvement from the net loss of $69.7 million reported in the year-ago quarter. Revenue grew 182.4% YOY.
  • Golden Entertainment Inc.: See above for company description.
  • Hilton Grand Vacations Inc.: See above for company description.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources
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  1. The Wall Street Journal. "Casinos Just Had Their Best Month Ever."

  2. YCharts. “Financial Data.”

  3. Golden Entertainment Inc. "GOLDEN ENTERTAINMENT REPORTS FIRST QUARTER RESULTS," Page 5.

  4. MGM Resorts International. "MGM RESORTS INTERNATIONAL ANNOUNCES COMPLETION OF ACQUISITION OF THE OPERATIONS OF THE COSMOPOLITAN OF LAS VEGAS."

  5. Hilton Grand Vacations Inc. "Hilton Grand Vacations Reports Record First Quarter Results, Raises Full Year Outlook and Cost Synergy Target, and Announces Share Repurchase Program," Page 12.

  6. Playa Hotel & Resorts NV. "Playa Hotels & Resorts N.V. Reports First

    Quarter 2022 Results," Page 13.

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