Are These Resort & Casino Stocks Too Much Of A Gamble?: Wynn Resorts, Limited (WYNN) and More

Carnival forecasted 2013 to be weak based on a slow recovery from its disaster. In 2013, the company has observed an increasing booking pattern post the commencement of the WAVE season and the demand trends have been strong. In the last few weeks, booking volumes have been operating at about 20% higher as compared to the previous year, due in part to the slower booking trends the company experienced after the Costa Concordia grounding in January of 2012.

Valuation Considerations

None of these firms is a screaming buy:

MPEL Melco Crown Entertainment 27.47 2.79 3.5 NA 0.72
LVS Las Vegas Sands 29.54 4.04 4.95 NA NA
MGM MGM Resorts NA 0.72 1.19 10.33 2.49
WYNN Wynn Resorts 26.3 2.48 30.71 NA NA
PENN Penn National Gaming 26.01 1.38 1.82 NA NA
CCL Carnival 23.36 1.97 1.27 NA 0.37
RCL Royal Caribbean 17.71 1.03 0.91 10.99 0.89

Only Royal Caribbean is interesting based on these financial metrics. It is trading at a discount to book value and at a low price-to-sales multiple. Its price-to-earnings multiple is on the pricey side, though.

Other stocks in this industry are impossible to bet on. Only MGM Resorts International (NYSE:MGM) is cheap based on price multiples, but it has a high debt-to-equity ratio.


Wait for lower valuations before jumping into resort and casino stocks. If you can’t resist the industry, consider Royal Caribbean as a buy candidate.

The article Are These Resort & Casino Stocks Too Much Of A Gamble? originally appeared on and is written by Bill Edson.

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