Perhaps it’s because trading stocks can often mirror the thrill of winning big at the blackjack tables, or maybe it’s because Las Vegas conjures images of the world’s most flashy brands and businessmen. Regardless of the reason, it’s clear that gambling stocks are always among the most popular on Wall Street.
Luckily for investors, now is also a great time to be buying gambling stocks, as continued domestic strength, a great recovery in Macau, and overall international interest in gaming have led to rising share prices. In fact, according to our Zacks Industry Rank data, the overall gaming industry has gained more than 26.5% year-to-date, outpacing the S&P 500’s mere 11.5% gain.
With casino stocks this hot right now, investors are not going to want to miss out. Luckily, we can use Zacks’ proven stock-picking methods to find solid stocks in any industry. Check out these casino stocks today:
1. Melco Crown Entertainment (MLCO - Free Report)
Melco Crown receives the majority of its revenue from Macau, so the company has benefitted from the continued recovery in the region. Interestingly, Melco missed the Zacks Consensus Estimate for earnings in its most recent quarter, but profits were up still up more than 200% from the year-ago quarter. Furthermore, revenues of $1.30 billion gained 21% year-over-year and did beat expectations.
Shares of Melco Crown have already recovered from a brief post-earnings dip, and estimates for the next fiscal year are already moving higher. These revised estimates have helped the stock earn a Zacks Rank #1 (Strong Buy), which pairs well with its better-than-industry-average current cash flow, expected earnings growth, and PEG ratio.
2. William Hill (WIMHY - Free Report)
William Hill is a provider of sports betting and gaming services, primarily in the United Kingdom—but also online and around the world. It’s actually been a tough year for the stock so far, but a Zacks Rank #2 (Buy) and strong fundamental valuation metrics look poised to turn this bookmaker around.
Indeed, with a P/B ratio of 1.63, a P/E ratio of 10.10, and a P/S ratio of 1.23, it seems the sell-off on William Hill shares has been overdone, and now the stock may be undervalued. On top of this, the company is expected to grow its earnings by 5% this year, and its current RoE is nearly twice the industry average. Income investors will also be interested to know that William Hill pays an impressive 4.41% dividend.
3. Ladbrokes Coral Group (LDCOY - Free Report)
Ladbrokes is another major British betting and gambling company with international sportsbook and online casino operations. As the European soccer leagues kick off, Ladbrokes is hitting its busy season, and with the stock currently sporting a Zacks Rank #2 (Buy), it could be the perfect time for investors to scoop up some shares.
On top of its strong Zacks Rank, Ladbrokes currently has a “A” grades for Value and Momentum, as well as an overall VGM grade of “A.” The stock’s beta rating is just 1.01, and Ladbrokes pays a respectable 2.10% dividend. On top of this, the company’s recent merger with Coral should continue to create new efficiencies and improve operating margins as time goes on.
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