#7 - MGM Resorts International (NYSE:MGM)
The last stock on our list is not a pure play hotel stock. However MGM Resorts International (NYSE:MGM) should definitely be on your list of stocks to buy as the economy reopens. MGM properties are a destination for many travelers, particularly those heading to Las Vegas. And an investment in MGM gives you exposure to both the casino and sports betting industries, the latter of which is becoming a closely watched growth opportunity.
Prior to casinos reopening, I wouldn’t have recommended MGM. In fact, the pandemic came at possibly the worst time for the company because it had just launched is BetMGM mobile betting app. It’s true that only about 18 states have legalized sports betting. But more are on the way. There are too many states that are trying to make up for massive losses in their budgets. Sports betting won’t take care of all of it, but it will help.
About MGM Resorts International
MGM Resorts International, through its subsidiaries, owns and operates casino, hotel, and entertainment resorts in the United States and internationally. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities.
Read More - Current Price
- $37.80
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 11 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $53.15 (40.6% Upside)
According to CareerBuilder CEO Irina Novoselsky, the hotel industry along with other companies in the hospitality industry, are making plans to ramp up hiring in anticipation of strong demand. And when you consider that many hotel chains on this list have credit cards tied to reward program, you have to expect that demand will be real.
However until there is more substantial evidence of a sustained economic recovery, hotel stocks will carry a risk premium. Investors may not see the recovery reflected in corporate earnings until late in 2021. However the hotel industry – particularly those chains that are less reliant on international revenue – should start realizing increased reservations as more Americans feel more comfortable about traveling.
Investors who want to speculate in this market without choosing a particular stock will have to be a bit selective when looking at the exchange-traded funds (ETFs). There is no ETF that is wholly dedicated to the hotel sector, but the Invesco Dynamic Leisure and Entertainment ETF (NYSEARCA:PEJ) has 40.6% of its exposure in the hotels, restaurant, and leisure sectors.
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