The COVID-19 pandemic became a double-whammy for consumer discretionary stocks in the casino resort industry. Las Vegas Sands (NYSE:LVS) and Wynn Resorts (NASDAQ:WYNN) shuttered their casinos in the Chinese gambling mecca of Macao. Then, once the contagion took hold in the United States, their casinos in Las Vegas followed suit.

Now, as the Las Vegas casinos begin to transition toward reopening, investors in both companies have to deal with the fallout from weeks of closure. The good news for both companies is that they can eventually recover as the effects of coronavirus begin to fade. Still, investors should study the financials and business conditions of both casinos to see where they should roll the dice.

The state of Las Vegas Sands

Las Vegas Sands stock peaked earlier than most U.S. stocks because of its particularly large exposure to Macao and the Asian gambling market. Its high came in January, and the drop began as Chinese authorities closed its casinos on the Cotai Strip in Macao for two weeks. Those casinos, which account for six of the company's 11 properties, reopened soon after. However, casino closures in Las Vegas followed and still remain in place. The company now eyes a Las Vegas reopening beginning with the Venetian on June 1.

Still, these closures have brought financial devastation. The company lost $0.03 per share in the first quarter, down from a profit of $0.91 per share in the same quarter last year. Revenue also fell by almost 56% year over year. Additionally, Las Vegas Sands suspended the $0.79 per share quarterly dividend and discontinued plans to build a resort in Japan.

As a result, Las Vegas Sands stock lost as much as 55% of its value. After a partial recovery, the current value of just under $50 per share is approximately one-third below the January peak.

LVS Chart

LVS data by YCharts.

This has taken Las Vegas Sands to a moderate valuation. The current P/E ratio is around just below 18. Also, when factoring out the earnings volatility caused by COVID-19, analysts predict profits will grow by a modest 6% per year on average for the next five years.

The company does not expect high levels of profitability until late summer or early fall in Macao. As the company makes its way back to full operations in Las Vegas and East Asia, the company should eventually move toward its pre-pandemic peak.

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Where Wynn Resorts stands

Though a smaller company than Las Vegas Sands, Wynn resorts faces similar challenges. With three of its six properties in Macao, it also saw the effects of the coronavirus early, then got hit again as its two Las Vegas properties and its casino in Massachusetts faced similar closures. The company has not announced plans to reopen its U.S. properties. Though its Macao properties have resumed operations, returning to the levels of business they saw before COVID-19 will take time.

This showed in the earnings release for the first quarter of 2020. Revenue dropped by 42% year over year. This led to a loss of $3.54 per share, reversing a $1.61 per share profit in the first quarter of 2019. Consequently, the company suspended its $1.00 per share quarterly dividend.

As one might expect, COVID-19 has had a dramatically negative effect on Wynn stock. Even though the stock has more than doubled since hitting its March low, it still trades at approximately 45% below the January 2020 peak around $153 per share.

WYNN Chart

WYNN data by YCharts.

The significantly lower profits have taken the company's current P/E ratio to about 69. This comes in far above the valuations of the last two years, when multiples settled in the teens and low 20s. Over the next five years, analysts forecast average earnings growth of nearly 20% per year.

While the company holds on to hopes of opening before the end of the month, it has not settled on a date when its U.S. casinos will bring back customers. Still, the prospects for Wynn stock should improve once a greater degree of certainty returns to the casino business.

Las Vegas Sands or Wynn Resorts?

As gamblers return, I expect revenue and profit levels for both companies to move toward pre-pandemic levels. However, at its current valuation, I would probably choose Wynn Resorts. For one, the expected five-year earnings growth rate is more than triple that of Las Vegas Sands.

Moreover, I do not think the current P/E ratio for Wynn Resorts measures the state of the company very well. Analysts believe the company will earn $4.67 in the next fiscal year. That would imply a 2021 P/E ratio of around 18 at current prices. That valuation is relatively inexpensive considering the nearly 20% expected average earnings growth.

Both Las Vegas Sands and Wynn Resorts will improve as conditions return to normal. However, at current prices, Wynn Resorts stock looks like a more profitable bet.