Please ensure Javascript is enabled for purposes of website accessibility

Why Wynn Resorts, Limited's Shares Are Up 33% in 2016

By Travis Hoium - Jul 6, 2016 at 11:24AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Optimism about a new resort is boosting this gaming giant in 2016.

Image source: Wynn Resorts.

What: Shares of gaming operator Wynn Resorts, Limited (WYNN 2.00%) have jumped 33% so far in 2016, according to data provided by S&P Global Market Intelligence, as investors anticipate its biggest growth project in years.

So what: Wynn Palace, the company's newest property in Macau within the Cotai region, will be a $4.1 billion expansion in the world's largest gaming market. It could also be Wynn's biggest cash generator from the day it opens in August.

Generally, there's also been more optimism about Macau's gaming market so far this year. Gaming revenue has appeared to stabilize and is down just 11.4% this year, which compares to a 37% decline at this time last year.

Now what: Cotai resorts have been the most profitable in Macau, with some generating over $1 billion in EBITDA -- a proxy for cash flow -- annually. If the past is any indication, Wynn will likely move to the top of that chart when Wynn Palace opens and that's what has investors so excited. I don't think shares look as undervalued today as they did when the year began, but if Wynn Palace performs as expected the stock still has lots of upside and a nice 2.2% dividend yield.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wynn Resorts, Limited Stock Quote
Wynn Resorts, Limited
WYNN
$58.12 (2.00%) $1.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.