How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in MGM Resorts (
MGM Quick Quote MGM - Free Report) ten years ago? It may not have been easy to hold on to MGM for all that time, but if you did, how much would your investment be worth today? MGM Resorts' Business In-Depth
With that in mind, let's take a look at MGM Resorts' main business drivers.
MGM Resorts International is a holding company and primarily owns and operates casino resorts through wholly owned subsidiaries. The company’s resorts portfolio incorporates 30 unique hotel offerings, including some of the most familiar resort brands in the industry such as Bellagio, MGM Grand, Mandalay Bay and The Mirage.
The company reports under three operating segments: Las Vegas Strip (43.5% of total revenues in 2020), Regional Operations (38.1%), MGM China (12.5%) and Management and other operations (5.9%). MGM China’s operations consist of the MGM Macau resort and casino (MGM Macau) and the company is currently developing an integrated casino, hotel, and entertainment resort on the Cotai Strip in the region. Meanwhile, in Oct 2015, MGM Resorts created a controlled real estate investment trust (REIT) named MGM Growth Properties LLC (MGP), which began trading in April 2016.
MGM Resorts International holds 73% interest in MGM Growth Properties LLC (MGP), a premier real estate investment trust engaged in the acquisition, ownership and leasing of large-scale resorts. It also owns 56% stake in MGM China Holdings Limited, which owns MGM MACAU and 50% of CityCenter in Las Vegas.
MGM Resorts recently acquired the operations of Empire City Casino in New York and Hard Rock Rocksino in Ohio, which was rebranded as MGM Northfield Park. In 2018, MGM Resorts opened MGM Springfield in Massachusetts, MGM COTAI in Macau, and the first Bellagio-branded hotel in Shanghai. The company’s superior business model, extensive non-gaming revenue opportunities, high-quality assets and attractive property locations are the primary growth drivers. In the past few years, it has taken various initiatives to align every recognized brand into one global entertainment brand. This resulted in a disciplined business model, with a unified view of strategy. Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in MGM Resorts a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2011 would be worth $3,428.57, or a gain of 242.86%, as of June 9, 2021, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 230.37% and gold's return of 17.77% over the same time frame.
Analysts are anticipating more upside for MGM.
Shares of MGM Resorts have outperformed the industry so far this year. Recently, the company reported first-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the metrics declined sharply year over year. The downside was primarily due to the temporary closure of certain properties for a portion of quarter, lower business volume, and travel and operational restrictions due to the pandemic. Despite the pandemic, the company is confident about prospects in Macau and will continue to invest in the same. This along with focus on asset light strategy, non-gaming activities and digital initiatives are likely to benefit the company in the upcoming periods. Meanwhile, the company is optimistic with respect to BetMGM operations as it expects revenue contributions of more than $1 billion in 2022.
The stock has jumped 13.93% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 8 higher, for fiscal 2021; the consensus estimate has moved up as well.