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 casino stocks are always among the most popular on Wall Street.
Luckily for investors, now is also a great time to be buying casino stocks, as continued domestic strength and a great recovery in Macau have led to rising share prices. In fact, according to our Zacks Industry Rank data, the overall gaming industry has gained more than 21% year-to-date, outpacing the S&P 500’s mere 11% 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:
Melco Resorts & Entertainment Ltd (ADR) (NASDAQ:MLCO)
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 “B” grade for Growth in our Style Scores system.
Caesars Entertainment Corp (NASDAQ:CZR)
Caesars has slowly been recovering since the Chapter 11 bankruptcy of its casino unit in 2015, and the stock has gained over 60% in the past year alone. Nevertheless, year-over-year comparisons are going to be a little less helpful for us given the company’s challenges last year. What is encouraging, however, is that current estimates are calling for earnings to continue improving—the tune of 766%—next fiscal year.
What’s even more encouraging is that Caesars is currently sporting a Zacks Rank #2 (Buy) and an overall VGM grade of “A.” We’ve also given CZR a “B” grade for Value, which means that this red-hot casino stock could still be undervalued.
Las Vegas Sands Corp. (NYSE:LVS)
With properties like the Venetian and the Parisian, Las Vegas Sands is the epitome of luxury and style in the casino industry. Although LVS is just a Zacks Rank #3 (Hold), the company recently smashed the Zacks Consensus Estimate by nearly 20%. Furthermore, the stock does hold an overall VGM grade of “A.”
Las Vegas Sands also boasts a net margin of 16.7% and RoE of 27.1%, both of which are significantly better than their respective industry averages.
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