Casinos are often popular dividend-paying picks, but the industry has come under significant pressure these year amid sluggish performances in key gambling hotspots.
This was underscored on Wednesday afternoon with the latest earnings report from Wynn Resorts ( WYNN - Free Report) . The casino giant posted profits of $1.68 per share, missing the Zacks Consensus Estimate by nine cents, and warned of a “slowdown” in Macau. A downtrend in Macau is concerning for Wynn, which depends on the Asian gambling destination to attract premium players. Management suggested traffic from high rollers was also soft in Singapore and Las Vegas. Shares of the already-struggling stock plummeted about 12% on Thursday as a result of this tepid outlook. Wynn currently holds a Zacks Rank #5 (Strong Sell). Weak performances in Macau and Las Vegas extend to many other casino giants, so this probably was not great news to hear if you are at all interested in gambling stocks. That said, there are some better options out there in this space. For instance, Gaming and Leisure Properties ( GLPI - Free Report) is a REIT that owns regional casino properties and leases them to operators like Penn National Gaming ( PENN - Free Report) and Boyd Gaming ( BYD - Free Report) . Buying a regional gambling property owner solves two problems: it moves you away from the trouble areas of Vegas and Macau, and it protects you from needing to fret over short-term trends regardless. GLPI has witnessed a strong uptick in its projected funds from operations (FFOs), but shares have been stuck in a rut lately. This presents an interesting buying opportunity, as we expect share prices to eventually follow the uptrend in FFOs. Moreover, GLPI is an interesting growth pick because it has a remarkable acquisition history. This is buoying its top line, as evidenced by its projected revenue growth of 21% next year. Plus, its status as a REIT gives investors a much bigger dividend. GLPI consistently raises this payout and currently presents a yield of 7.5%. Make sure to check out today’s video to hear Ryan’s complete thesis on WYNN and GLPI right now! Looking for Stocks with Skyrocketing Upside? Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
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