Casino Stock Growth
Now is a good time to be in the casino game. The Dow Jones US Gambling Index (DJUSCA) is up by more than 22 percent so far in 2017, which is more than triple the growth of the Dow Jones Industrial Average. The 22.2 percent increase narrowly comes out ahead of the Dow’s technology index, which is up 21.5 percent so far this year. The DJUSCA is comprised of Las Vegas Sands, Wynn Resorts and MGM Resorts.
Perhaps what’s most impressive about that figure is that the casino index is comprised of just those three companies, while the tech index includes over 120. Some of the most notable brands on the planet, including Apple, Dell, Oracle, Google and eBay, are included in the tech index. The fact that casinos have shown more growth than noted fast-risers like those tech companies is remarkable.
As a result, an investment into those casino companies would theoretically be worth more money than putting the same amount in a tech company. Individually, Sands has reported 16 percent growth, MGM is up 12 percent and Wynn is all the way up to 54 percent over where they were in 2016.
Of course, this number doesn’t reflect a full year’s worth of growth. If you go back to June of last year, tech stocks are up 36.5 percent compared to 34.25 percent for casinos. The current number just reflects the period between January 2017 and today.
Not Just Big Corporations
The expansion isn’t limited to those three aforementioned companies, either. A smaller regional operator, Boyd Gaming, grew by 2.4 percent in 2016. Boyd specializes in off-the-Strip properties around Las Vegas, including buildings in downtown Vegas. The biggest gaming improvements in the city have actually come from properties that aren’t on the Strip, including Boyd’s Fremont, Main Street and California properties.
A share of Boyd’s stock was selling for about $17 last November. As of today, it’s over $25, which is a gain of 47 percent. Most of Boyd’s properties are located in Nevada, though they do have others located in Indiana, Illinois, Louisiana, Kansas and Mississippi.
The growth isn’t limited to the United States, either. Casinos in Macau, China, crushed expectations in May, growing by nearly 24 percent. Noted CNBC money expert Jim Cramer wrote that he is optimistic about casino stocks moving forward, thanks in large part to China:
“Now that the People’s Republic of China is starting to bless high rolling again, I guess it was just a matter of time before these stocks returned to form. I like them all.”
With the legalization of gambling in Japan, stocks are only expected to continue to improve, which is an exciting prospect for the casino industry worldwide. Japan is likely to distribute up to four resort licenses within the next year. Sands, MGM and Wynn are expected to be right at the front of the line of those bidding for the rights to build in Japan.
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