{"id":207888,"date":"2022-04-04T09:01:04","date_gmt":"2022-04-04T16:01:04","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=207888"},"modified":"2022-04-04T12:20:50","modified_gmt":"2022-04-04T19:20:50","slug":"regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/","title":{"rendered":"Century, Golden Entertainment Among Best Regional Casino Cash Flow Stories, Says Analyst"},"content":{"rendered":"

In what\u2019s been a trying start to 2022 for the broader gaming equities complex, some regional casino operators are standing out, and they have something in common: Ability to generate free cash flow (FCF).<\/p>\n

\"regional
Golden Entertainment’s Strat Las Vegas, seen in an advertisement above. An analyst likes the operator’s free cash flow potential. (Image: Twitter)<\/figcaption><\/figure>\n

Operators with sturdy balance sheets and impressive FCF-generating capabilities include Century Casinos (NASDAQ:CNTY)<\/a> and Golden Entertainment (NASDAQ:GDEN). In a note to clients today, Roth Capital analyst Edward Engel highlights that pair of regional casino equities, among others.<\/p>\n

Regional gaming stocks with attractive FCF yields have been relative outperformers in 2022, and we expect this outperformance to continue amid an uncertain macro environment,\u201d<\/strong> said the analyst.<\/p><\/blockquote>\n

Engel notes that the current climate isn\u2019t comparable to the second half of 2018, when gaming equities tumbled amid investors\u2019 fears of rising interest rates.<\/p>\n

This time around, investors likely understand the improving gross gaming revenue (GGR) story offered by regional operators and the potential for 2022 GGR data to surprise to the upside, he adds.<\/p>\n

Century, Golden Among Cream of FCF Crop<\/h2>\n

Engel has \u201cbuy\u201d ratings on Colorado-based Century and Strat owner Golden Entertainment. The former sports an FCF yield of 15% — 20% excluding capital spending — while the latter yields a tidy 12% on an FCF basis.<\/p>\n

In February, Century said it\u2019s paying $195 million for the Nugget Sparks casino<\/a> and a 50% interest in the real estate company that owns the gaming venue. That\u2019s providing the operator with an entry into Nevada, and the move is largely praised by analysts.<\/p>\n

\n

For its part, Golden is an impressive FCF\/shareholder rewards story. On its current free cash flow trajectory, it\u2019s possible Golden will generate approximately $200 million in cash this year \u2014 more than 10% of its market capitalization \u2014 for share repurchases<\/a>. In the final three months of 2021, the casino operator bought back $10.6 million of its stock. The bulk of Golden\u2019s portfolio are Nevada casinos frequented by locals, and the operator has no near-term new project risk.<\/p>\n<\/div>\n

\u201cAnother key difference vs. 2H18 is financial leverage, where both balance sheets and FCF profiles have improved materially. Before the pandemic, 4-5x net debt to EBITDA was considered \u2018normal\u2019, but leverage profiles have now moderated to 2-3x,\u201d Engel added. \u201cMeanwhile, several operators, such as GDEN, are now harvesting FCF after major CapEx initiatives last decade.\u201d<\/p>\n

Cautious on Penn<\/h2>\n

Penn National Gaming (NASDAQ:PENN) is the largest regional casino operator in the US. Its land-based gaming operations are expected to generate a free cash yield of 11%. But Engel is cautious on the name.<\/p>\n

\n

The analyst lowers his price target on Penn to $46 from $51 with a \u201cneutral\u201d grade, implying only a modest upside from the April 1 close of around $42. He says that the target includes $20 of value ascribed to the operator\u2019s online business.<\/p>\n<\/div>\n

He also reiterates a \u201cbuy\u201d rating on Full House Resorts (NASDAQ:FLL), with a $16 price forecast. That\u2019s more than 60% above current levels.<\/p>\n","protected":false},"excerpt":{"rendered":"

In what\u2019s been a trying start to 2022 for the broader gaming equities complex, some regional casino operators are standing out, and they have something in common: Ability to generate free cash flow (FCF). Operators with sturdy balance sheets and impressive FCF-generating capabilities include Century Casinos (NASDAQ:CNTY) and Golden Entertainment (NASDAQ:GDEN). In a note to […]<\/p>\n","protected":false},"author":46,"featured_media":207891,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nRegional Casino Stocks Century, Golden Offer Robust FCF, Says Analyst<\/title>\n<meta name=\"description\" content=\"Century, Golden Entertainment among regional casino stocks with impressive FCF potential.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Regional Casino Stocks Century, Golden Offer Robust FCF, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"Century, Golden Entertainment among regional casino stocks with impressive FCF potential.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-04-04T16:01:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-04-04T19:20:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/strat.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1125\" \/>\n\t<meta property=\"og:image:height\" content=\"1122\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/\",\"name\":\"Regional Casino Stocks Century, Golden Offer Robust FCF, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/strat.jpg\",\"datePublished\":\"2022-04-04T16:01:04+00:00\",\"dateModified\":\"2022-04-04T19:20:50+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Century, Golden Entertainment among regional casino stocks with impressive FCF potential.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/regional-casino-stocks-century-golden-offer-robust-fcf-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/strat.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/strat.jpg\",\"width\":1125,\"height\":1122,\"caption\":\"Golden Entertainment's Strat Las Vegas. 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