MGM Resorts (NYSE:MGM) International, the operator of prestigious casinos including the MGM Grand, Bellagio, and Mandalay Bay, has managed to provide a nearly 40% return to investors over the past five years despite significant industry challenges like the COVID-19 pandemic. The company is now strategizing for future growth, consolidating its business in China and expanding into potentially lucrative markets such as New York State and Osaka, Japan.
In the recent quarter, MGM saw a recovery in Macau that led to a 21% year-on-year increase in net revenue to $3.9 billion. This demonstrates the company's successful navigation through industry challenges. Despite a cyberattack in September, the majority of guest-facing systems were restored with negligible impact on annual results.
In partnership with Orix (NYSE:IX) Corp, MGM has won approval for a $10 billion property in Osaka. This project is projected by Morningstar to generate over $4 billion annually upon completion by 2030. CEO Bill Hornbuckle is also aiming to secure one of the three casino licenses for New York City by 2024. His strategy leverages MGM's small regional property in Yonkers and includes expansion into live table games.
As part of its financial strategy, MGM has implemented share buybacks worth $626 million, a move that is in line with InvestingPro Tips that indicate aggressive share buyback by the management. The company is maintaining a price-to-earnings (P/E) multiple of 25, though real-time metrics from InvestingPro show a current P/E ratio of 38.74, indicating a high earnings multiple, another insight from InvestingPro Tips. This aligns with its revenue of $13 billion in 2022, which is slightly lower than the latest revenue figures from InvestingPro Data, reporting a revenue of $14,777.7 million in the second quarter of 2023.
The company's strategic planning and robust financial performance underscore its resilience and potential for further growth despite ongoing industry challenges. With a market cap of $13.15 billion as per InvestingPro Data, MGM's liquid assets exceed short-term obligations, suggesting a strong financial position. Moreover, the company's stock has seen a significant return over the last week, with a 9.26% increase, according to InvestingPro's real-time metrics. For more insights like these, visit InvestingPro which offers additional tips and real-time metrics.
Overall, MGM Resorts International continues to show promise as an investment, with a strategy that has navigated industry challenges and is poised to capitalize on new growth opportunities. The company's aggressive buyback strategy and strong financial performance, coupled with promising projects in Osaka and New York City, make it a compelling consideration for investors.
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