{"id":209762,"date":"2022-04-18T12:11:06","date_gmt":"2022-04-18T19:11:06","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=209762"},"modified":"2022-04-18T12:20:11","modified_gmt":"2022-04-18T19:20:11","slug":"century-golden-among-gaming-equities-with-stout-fcf-prospects","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/","title":{"rendered":"Everi, Golden Entertainment Among Gaming Equity Free Cash Flow Leaders"},"content":{"rendered":"

With interest rates rising and inflation soaring, companies\u2019 ability to generate free cash flow (FCF) is all the more important. The gaming industry is home to several that are answering that call.<\/p>\n

\"gaming
The Century Casino in Central City, Colo. Century is among the gaming equities with strong free cash flow prospects. (Image: Century Casinos)<\/figcaption><\/figure>\n

In a note to clients today, Roth Capital analyst Edward Engel highlights several gaming equities offering a combination of exposure to resilient regional demand trends and strong FCF-generating capabilities. Those include Century Casinos<\/a> (NASDAQ:CNTY), Everi (NYSE:EVRI), and Golden Entertainment (NASDAQ:GDEN).<\/p>\n

As the pandemic continues to fade, we see late-recovery themes overpowering headwinds related to inflation and higher interest rates, where Gaming demand proved resilient last decade throughout several choppy environments,\u201d<\/strong> said Engel. \u201cWe also believe attractive FCF yields can offer floors to valuations, with potential for meaningful upside as market conditions stabilize.\u201d<\/strong><\/p><\/blockquote>\n

The analyst has \u201cbuy\u201d ratings on regional casino operators Century and Golden, as well as on gaming machine manufacturer and fintech purveyor Everi.<\/p>\n

Century, Golden Tapping Into Regional Strength<\/h2>\n

Las Vegas-based Golden operates 10 casinos<\/a>, nine of which are in Southern Nevada, including the Strat. But none of those venues are considered Strip properties.<\/p>\n

\n

Rather, the bulk of Golden\u2019s business is derived from the Las Vegas locals market, including retirees and staffers from other gaming companies. The exposure to older gamblers is a plus, and gaming equity could generate a FCF yield of 12% to 13%, notes Roth\u2019s Engel.<\/p>\n<\/div>\n

\u201cGDEN’s exposure to 65+ demographics and the LV Strip offer strong late recovery themes that should overpower inflationary headwinds,\u201d says the analyst. \u201cWhile inflation appears to be curtailing consumer spending in some categories across the US, gaming demands appears resilient, while LV Strip operators are benefiting from higher prices by flexing room rates.\u201d<\/p>\n

As for Century, that operator has no Las Vegas footprint. In February, it said it\u2019s paying $195 million for the Nugget Sparks casino<\/a> \u2013 marking its initial entry into Nevada.<\/p>\n

\u201cCNTY trades at an 11% yield to 2022E FCF and 8% to 2023E (peak CapEx year),\u201d <\/strong>adds Engel. \u201c1Q22 has proven resilient, with Missouri reported GGR +1% QoQ and West Virginia GGR +2%. We also expect Poland and Canada to show further sequential improvement in 1Q, particularly Poland which we see surprising to the upside.\u201d<\/strong><\/p>\n

Colorado-based Century is believed to be shopping its two-thirds stake in Casinos Poland.<\/p>\n

Bullish on Everi, Too<\/h2>\n

What\u2019s expected to be a robust slot replacement cycle and continued adoption of cashless gaming are among the drivers of Everi\u2019s impressive FCF story.<\/p>\n

A major part of the Everi investment thesis is the company\u2019s fintech offerings, and that\u2019s underpinned by the move to cashless gaming<\/a> at casinos across the country \u2014 one sped along by the coronavirus pandemic.<\/strong><\/p>\n

\u201c<\/strong>Meanwhile, we believe the slot replacement cycle is reaccelerating independently of economic conditions, where gaming operators are guiding meaningful rebounds in maintenance CapEx for 2022 (+30-40%),\u201d concludes Engel.<\/p>\n","protected":false},"excerpt":{"rendered":"

With interest rates rising and inflation soaring, companies\u2019 ability to generate free cash flow (FCF) is all the more important. The gaming industry is home to several that are answering that call. In a note to clients today, Roth Capital analyst Edward Engel highlights several gaming equities offering a combination of exposure to resilient regional […]<\/p>\n","protected":false},"author":46,"featured_media":209766,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nCentury, Golden Among Gaming Equities With Stout FCF Prospects<\/title>\n<meta name=\"description\" content=\"Century Casinos, Everi, Golden Entertainment could be FCF leaders among gaming equities.\" \/>\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\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Century, Golden Among Gaming Equities With Stout FCF Prospects\" \/>\n<meta property=\"og:description\" content=\"Century Casinos, Everi, Golden Entertainment could be FCF leaders among gaming equities.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/\" \/>\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=\"2022-04-18T19:11:06+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-04-18T19:20:11+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/cnty.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1280\" \/>\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=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/\",\"url\":\"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/\",\"name\":\"Century, Golden Among Gaming Equities With Stout FCF Prospects\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/cnty.jpg\",\"datePublished\":\"2022-04-18T19:11:06+00:00\",\"dateModified\":\"2022-04-18T19:20:11+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Century Casinos, Everi, Golden Entertainment could be FCF leaders among gaming equities.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/century-golden-among-gaming-equities-with-stout-fcf-prospects\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/cnty.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/cnty.jpg\",\"width\":1920,\"height\":1280,\"caption\":\"The Century Casino in Central City, Colo. 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