MGM Resorts International (MGM - Free Report) , alongside its casino business, relies on non-gaming revenues to drive the overall top line. The company’s wholly-owned subsidiary, Bellagio, announced the inauguration of Sadelle’s in Las Vegas, a restaurant from Major Food Group.
The move is in line with MGM Resorts’ relentless domestic ventures that allow it to have a competitive edge over other gaming establishments based in Las Vegas. This move also underscores MGM Resorts’ sincere focus on deriving from non-gaming opportunities.
Notably, in the past three months, shares of MGM Resorts have gained 3.7% against the industry’s 5.5% decline.
Focus on Domestic Markets
MGM Resorts’ properties are well diversified within the United States. Particularly, the company’s Las Vegas business is likely to perform well on the back of an improving economic scenario and increased tourism numbers. Moreover, the company operates under a number of business segments — including hotel, casino, food, and beverage and entertainment. Meanwhile, it continues to make important investments whenever it sees an opportunity. It is in a solid position with The Park, The Plaza, T-Mobile and New York-New York that are likely to continue drawing more people to Las Vegas.
MGM Resorts is continuing to maximize performance in the domestic resort portfolio. The company expects moderate revenue growth due to its continuous improvement efforts and an ongoing disciplined approach to the top line and cost control.
We believe that the addition of Sadelle’s will help MGM Resorts witness increased traffic in its Las Vegas operations. Alongside, the company’s superior business model, extensive non-gaming revenue opportunities, high-quality assets and attractive property locations are expected to remain major revenue drivers. Net revenues from Las Vegas operations are also likely to benefit from the move.
As it is, in the last reported quarter, net revenues of $2,231.5 million from the company's domestic resorts declined 2% from the prior-year quarter.
Zacks Rank & Stocks to Consider
MGM Resorts currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the same industry include Wynn Resorts (WYNN - Free Report) , Churchill Downs (CHDN - Free Report) and Melco Resorts (MLCO - Free Report) . While Wynn Resorts currently sports a Zacks Rank #1 (Strong Buy), Churchill Downs and Melco Resorts carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Churchill Down and Melco Resorts’ earnings for 2019 are expected to increase 26.7% and 3.1%, respectively. Wynn Resorts currently has a VGM Score of B.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>