Looking at the stock market's performance, it's hard to believe we're still in the middle of a global pandemic. The S&P 500 is up about 1.24% as of this writing, erasing most of its losses in the first quarter. But despite the massive rally, there are still some opportunities for investors to scoop up quality stocks for cheap -- especially in the hard-hit tourism industry.

Walt Disney (NYSE:DIS) and MGM Resorts (NYSE:MGM) are two vacation stocks that fit the bill. Both companies boast world-class brands and have catalysts for long-term growth in this challenging economic environment. Here's why both stocks are poised for a bull run.

U.S. currency in a glass jar.

Image source: Getty Images.

1. Walt Disney

Walt Disney is getting clobbered from all sides during the coronavirus pandemic, with its movies delayed, cruise line grounded, and amusement parks operating at reduced capacity. This month, Disney re-closed its Hong Kong location after a surge of infections in the city. And it has once-again delayed the release of Mulan because movie theaters in the U.S. and China remain closed amid the crisis.

But despite the near-term challenges, Disney remains an attractive investment because of its rock-solid brand and fast-growing media operations. The company's media networks and direct-to-consumer (streaming) businesses are growing fast enough to offset the declines in its coronavirus-impacted segments -- and stand to benefit from stay-at-home demand if the crisis gets worse.

Disney reported second-quarter earnings on May 5, and the results show stellar performance in the company's new streaming services, Disney+, Hulu, and ESPN+.

In total, the direct-to-consumer segment grew sales by 258% from $1.15 billion to $4.12 billion year over year, and this performance was driven by the fast-growing Disney+ platform that now boasts 33.5 million paid subscribers. Hulu and ESPN+ have 32.1 million and 28.8 million subscribers, respectively. Disney's direct-to-consumer segment is poised to take on larger rivals like Netflix because all three platforms can be bundled into a cost-effective $12.99 package.

2. MGM Resorts

MGM Resorts is one of the world's most iconic casino operators, known for its renowned properties like the Bellagio and MGM Grand in Las Vegas. The gaming giant also boasts a large footprint in Asia through a handful of resorts in Macao, China.

MGM Resorts, like all casino operators, has been smashed by the coronavirus pandemic. Shares are down by 52% year to date compared to a 1% decline in the S&P 500. But despite the near-term challenges, MGM is poised for a massive rebound due to its expansion into sports betting and the easing of travel restrictions in China, where it generated around 23% of fiscal 2019 revenue.

On July 15, mainland Chinese officials lifted some restrictions on visitors leaving Guangdong province into Macao. Guangdong is the main entry point for mainland Chinese visitors into Macao, and this move is expected to ease some of the pressure on the gaming hub. MGM's CEO believes Macao gaming revenue will recover quickly when travel restrictions are lifted. But investors shouldn't expect sales to return to previous levels immediately because travelers will still be subject to some restrictions, such as mandatory COVID-19 testing before entering or exiting the city. 

MGM also has a growth opportunity in sports betting -- a market projected to expand at a compound annual growth rate of 8.8% through 2024. The company has developed a mobile app called BetMGM that offers sports betting as well as regular casino games on the go. MGM is promoting its new business through partnerships with respected sports brands like Buffalo Wild Wings and the Denver Broncos.

The Takeaway

The coronavirus pandemic is still a major challenge for the tourism industry going forward. But companies like Walt Disney and MGM Resorts can recover because of their strong brands, diversified business models, and expansion into mobile revenue opportunities like streaming and sports betting. Both companies look poised to for a bull run, and this is a good opportunity for investors to hop on board while prices are still cheap.

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.