Shares of Wynn Resorts (NASDAQ:WYNN) are up 84% in 2017 and 131% since the beginning of 2016, leading a recovery in casino stocks in Las Vegas and Macau. The stock gains have coincided with a jump in Macau's casino revenue overall and the buildout of Wynn's new resorts. 

Given the tailwinds Wynn Resorts is seeing in the casino industry, the stock's strong run might not be over. Here's what investors should know about the last two years and what to look for in the future. 

Rendering of Wynn Boston Harbor.

Rendering of Wynn Boston Harbor. Image source: Wynn Resorts.

Macau is getting hot in the right places

Not only is Macau back to growing in 2017, it's growing in the VIP market where Wynn Resorts excels. You can see below that over the last two years mass market baccarat play is up 11.3%, but VIP baccarat play is up 33.4%. That plays right into Wynn's wheelhouse. 

Chart of Macau gaming revenue by segment.

Data source: Macau Gaming Inspection and Coordination Bureau.

This is a change from the 2014 to 2016 period, when VIP play plunged and mass market play was less impacted. Wynn took the brunt of the overall revenue decline, and competitors like Las Vegas Sands (NYSE:LVS) took market share. Now the tables have turned. 

Growth is back at Wynn Resorts

For most of the past five decades the gaming industry has been in expansion mode. The Las Vegas Strip and regional casinos in the U.S., Macau, and Singapore were all growth markets over that time. But in the last few years there have been few opportunities for growth. Las Vegas' casino revenue isn't growing enough to justify new resorts, and there won't be a new major development built between 2010 and 2020. Most regional gaming markets have also struggled, and Asian markets are highly regulated, limiting growth opportunities. 

Wynn has more growth potential than most of its rivals, and it's building in very attractive areas. It opened Wynn Palace last year, its second resort in the Macau region. The resort is already generating over $500 million in revenue per quarter, and it could make over $1 billion in EBITDA -- a proxy for cash flow -- when construction in the region is completed and the resort is running at full steam. 

On top of Macau, Wynn is building the $2.4 billion Wynn Boston Harbor near downtown Boston, an enviable position in one of the country's wealthiest urban markets. Construction is also slated to begin early next year on a new phase of development in Las Vegas, where the Wynn golf course currently sits. 

These three developments combined will more than double Wynn's revenue and EBITDA. 

How Wynn's run could continue

Three things could drive Wynn Resorts' stock higher in the next few years. First is continued growth in Macau's VIP market, which could drive EBITDA from Macau alone to near $1 billion. Second is strong performance from the U.S., where Wynn Boston Harbor and the Las Vegas expansion will provide growth, but an uncertain impact to profits. If return on investment, measured by EBITDA divided by capital expenditures, is over 15%, it will mean a strong return on the cash Wynn invested in the properties. 

What could really excite investors is if Wynn Resorts decides to increase its dividend from its current $2 per share annually. Wynn has paid a dividend as high as $8 per share annually in the past, and once new projects are completed it's conceivable the dividend payout could be $8 per share or more. Investors are looking at casino stocks as dividend plays more and more, and Wynn could be both a great dividend stock and a growth stock for years to come. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.