Casino Stocks To Buy 2021

When the COVID-19 pandemic hit, land-based casinos were hit hard. Many states forced them to shut down to slow the spread of the coronavirus. However, that move greatly benefited online gambling companies as people who usually gamble in brick-and-mortar casinos turned to cyberspace to get their fix.

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The choice may seem clear for those who are debating whether to invest in online gambling stocks or land-based casino stocks. Online gambling firms have been the clear beneficiary of the pandemic, while brick-and-mortar casinos have taken a hit. However, things aren’t so cut and dry.

Soaring prices of online gambling stocks

Aside from the pandemic, another reason that investors have been buying online gambling stocks is because of the momentum. Once things got rolling in 2020, they never really slowed down, which resulted in soaring valuations for names like DraftKings and Penn National Gaming.

These stocks have also benefited from the expansion of online gambling. Sports betting, in particular, has grown rapidly, although many states that have legalized it have limited it to just in-person betting so far. DraftKings stock jumped again this month as New York moved toward legalization of online sports betting. The state could end up being one of the biggest markets for online sports betting in the country.

One problem with online gambling stocks is that some would argue that prices have gotten too high. However, others think that such stocks will keep going up along with the rest of the stock market.

Why you shouldn’t write off brick-and-mortar casino stocks yet

Many investors have given up on land-based casino stocks in 2021 due to the pandemic, but this could be the right time to dive in rather than waiting on the sidelines. At some point, casinos will reopen, and people will start pouring through the doors.

The pandemic has created pent-up demand for gambling in 2021, and not everyone wants to turn to new online casinos. The stocks of many companies that will benefit from the economic recovery have started to pop as investors place bets on that recovery. The only question now is how much longer it will be before land-based casinos can reopen at their usual capacity.

Some stocks offer exposure to both online gambling and brick-and-mortar casinos. For example, MGM Resorts International is moving into the sports betting space, and it also operates land-based casinos. Penn National Gaming is also a hybrid company with both online and offline betting operations. The company plans to launch its Barstool Sportsbook app in every state where sports betting is legal by the end of this year.

The post Online Gambling Stocks Versus Land-Based Casino Stocks In 2021 appeared first on ValueWalk.

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Restrictions on travel and the novel coronavirus-induced market slowdown have had a crippling effect on casino stocks in the past year. So much was expected from the casino business, with several new states approving gaming statutes and the popularity of iGaming.

However, the approval of the vaccine and the resultant economic turnaround should boost casino stocks in 2021. In fact, investor sentiment is already improving, with a 3-month gain of about 20% for the VanEck Vectors Gaming ETF (NASDAQ:BJK)

Additionally, visitors are expected to pick up at a steady pace in the first few months of the year. And widespread adoption of the vaccine could bode well for a significant increase in activity in the second half of the year. Moreover, the White House transition should give investors more confidence about casino stocks with exposure to China.

With all of that in mind, let’s look at three casino stocks that could make a comeback this year:

• Wynn Resorts (NASDAQ:WYNN)
• MGM Resorts (NYSE:MGM)
• Las Vegas Sands (NYSE:LVS)

Now, let’s dive in and take a closer look at each one.

Casino Stocks to Buy: Wynn Resorts (WYNN)

Wynn Resorts has had it had incredibly tough during the pandemic, as it relied mainly on revenues generated from brick-and-mortar casinos. It has finally made its long-awaited entry into the online gaming market with its app called WynnBet. Moreover, with its operations weighted toward Macao, WYNN stock could witness a quicker recovery than its peers.

The company witnessed a double-digit reduction in revenues in the past three quarters. However, gaming revenue overall is picking up nicely in Macau, with a 228% increase in revenues in October last year. That said, Wynn Resorts has significant exposure towards the Chinese gaming capital, which will play a huge role in its recovery. Widespread adoption of the vaccine should lead to an increase in domestic foot traffic to Wynn’s resorts. Moreover, it is also expanding WynnBet’s presence to several new states to compete with the big fishes in the iGaming world.

MGM Resorts (MGM)

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MGM Resorts boasts one of the largest integrated casino, hotel and entertainment resort portfolios globally. It is a critical player in the domestic market with a Las Vegas strip-heavy portfolio and a strong presence in several states. It has been in the news lately, with its $11 billion buyout bid for UK-based sports betting platform Entain. The deal has fallen through, but even without it, MGM stock has several catalysts that will continue to push it higher in 2021.

The going has been understandably tough for MGM, but its third-quarter results show a 280% increase in revenues sequentially. Foot traffic should continue to increase in the coming months, further boosting revenues. BetMGM, its online sports-betting platform, currently has 17% of the industry’s market share with heaps of potential. UBS analyst Robin Farley feels that the platform could include 38 states by 2025, with a roughly $20 billion market value.

Therefore, MGM’s investors have a lot to look forward to. And its stock price should rise considerably in the coming months.

Casino Stocks to Buy: Las Vegas Sands (LVS)

87-year-old Las Vegas Sands founder and CEO Sheldon Adelson breathed his last this month, one of the biggest losses for the gaming industry. He leaves behind a financially robust company with a sizeable cash balance and multiple tail-winds for massive growth this year. With the vaccine’s approval and higher gaming revenues from Macao, LVS stock is up roughly 4% in the past three months.

Earning results for the company have been lackluster in 2020, but analysts expect a huge bump in revenues in soon. A lot of it is down to the increase in Macao’s gaming revenues and the steady recovery in domestic demand. The company will be investing heavily in Marina Bay Sands Singapore and Macao in the next couple of years. Moreover, the new management under acting CEO Robert G. Goldstein will be focusing more on making massive inroads in the online sports gaming business.

Thus, expect Las Vegas Sands to explore new growth opportunities in the coming year and beyond.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

Best Casino Stocks To Buy

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