Golden Entertainment, Inc. (GDEN): A Best Casino Stock that Pay Dividends?

We recently compiled a list of the 10 Best Casino Stocks that Pay Dividends. In this article, we will have a look at where Golden Entertainment, Inc. (NASDAQ:GDEN) ranks among other casino stocks that pay dividends.

The casino industry is making a comeback after the setbacks caused by the pandemic in 2020. It took a while for the sector to recover, with several factors at play, but the rebound is now clear with the easing of social distancing measures. Data from the Gaming Inspection and Coordination Bureau showed that Macau’s gaming revenue surged by 14.8% in August this year, surpassing expectations. The increase in demand for entertainment during China’s summer vacation has driven growth in the world’s largest casino hub. Casino stocks fall under the larger leisure and hospitality sector and are affected by a range of influences, such as the state of the economy, consumer spending habits, and changes in gambling regulations.

Also read: 10 Best Casino Stocks To Buy According to Analysts

Investor confidence in the casino industry has also skyrocketed, thanks to their ability to consistently hit it out of the park over the years. Casino revenues experienced a notable increase in 2023. Additionally, online casinos, which mainly gained importance during the pandemic, also posted record earnings last year. A report by the American Gaming Association (AGA) revealed that brick-and-mortar casino slots and table games generated a record $49.4 billion in 2023, marking a 3.3% increase over 2022. On the state level, 19 out of 27 traditional gaming markets achieved record annual revenues. Online casino revenue also surged in 2023, growing 22.9% year-over-year to $6.2 billion across the six states with fully legalized iGaming. The report further highlighted that 12 of the top 20 commercial casino gaming markets saw revenue growth, with the Las Vegas Strip leading the way with the most significant year-over-year gains.

The casino industry, like many others, is evolving quickly to keep up with current trends. In a recent move, Singapore has made changes to the Casino Control Act, allowing its two casinos to offer cashless gaming options, though cryptocurrencies will not be permitted, as reported by CNA. Cashless bets can be placed at gaming tables or machines by using virtual credits from cashless gaming accounts or e-wallets. This adjustment is the most recent update to casino regulations in Singapore, which had previously tightened rules by lowering the threshold for monitoring cash deposits at casinos to prevent misuse by terrorist and criminal groups.

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The shift to cashless betting has highlighted people’s growing preference for digital platforms. The pandemic underscored the need for contactless options while still allowing people to enjoy these activities. Sports betting is also becoming more prominent since it operates through digital channels, providing a similar thrill to that of casinos. According to the AGA, while commercial gambling revenue is on the rise in most states where it’s legal, the growth in sports betting and online gambling is outstripping that of traditional casinos. So much so that it seems that Americans are withdrawing funds from their stock brokerage accounts to support their online betting habits. This is the main conclusion from a recent working paper titled Gambling Away Stability: Sports Betting’s Impact on Vulnerable Households. The paper suggests that for every dollar spent on sports betting, net investments in stocks and other financial assets decreased by just over $2. With that, we will now take a look at some of the best casino stocks that pay dividends.

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Our Methodology:

For this list, we scanned Insider Monkey’s database of Q2 2024 and selected companies that are involved in the casino and gambling industry. These companies own and operate casinos, resorts, and other gaming and entertainment facilities. From the resultant list, we picked the 10 best casino stocks that pay dividends to shareholders and ranked them in ascending order of the number of hedge funds having stakes in them as of Q2 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

9. Golden Entertainment, Inc. (NASDAQ:GDEN)

Number of Hedge Fund Holders: 11

Golden Entertainment, Inc. (NASDAQ:GDEN) is a Nevada-based entertainment company that operates casinos, taverns, and slot routes. The company was formed in 2015 as a result of a merger between Golden Gaming and Lakes Entertainment. The stock hasn’t been doing really well this year, falling by over 21% since the start of 2024. The company is experiencing competition pressure, reporting revenues of $167 million in the second quarter of 2024, which fell significantly by over 41% from the same period last year.

That said, Golden Entertainment, Inc. (NASDAQ:GDEN) is making consistent efforts to strengthen its balance sheet. Since 2021, the company has repaid $750 million of debt through free cash flow and non-core asset sales. It also actively returned capital to shareholders through its regular dividend and by repurchasing nearly one million shares. With solid operating cash flow and a strong balance sheet, it plans to maintain both strategic and financial flexibility while continuing to return capital to shareholders throughout the year.

Golden Entertainment, Inc. (NASDAQ:GDEN) initiated its dividend policy in March this year. The company offers a quarterly dividend of $0.25 per share. Since the start of its dividends, it has returned $14.3 million to shareholders through dividends, which makes GDEN one of the best casino stocks that pay dividends. The stock’s impressive dividend on September 12 came in at 3.19%.

As of the close of Q2 2024, 11 hedge funds in Insider Monkey’s database owned stakes in Golden Entertainment, Inc. (NASDAQ:GDEN), compared with 14 in the previous quarter. These stakes have a total value of more than $103 million. With over 1 million shares, Hill Path Capital was the company’s leading stakeholder in Q2.

Overall, GDEN ranks 9th on our list. While we acknowledge the potential for GDEN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.