With the Kentucky Derby Coming Up, Churchill Downs Is Primed for Success

As the Kentucky Derby approaches, many people fail to realize the Churchill Downs is a publicly traded company. The company owns Churchill Downs, as well as Arlington International Racecourse and Fair Grounds Slots and Racecourse. Horse racing is a very interesting industry as it spans the world and there are many different factors that can affect the industry. Certainly there is the public pressure that the sport may be curial, but this sport has been around for generations and is not going anywhere for the near future.

Published over a year ago
View all stories for Churchill Downs | View All Stories
Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.

Reviewed by Raphi Shpitalnik

Now, let us take a look at the most recent 8-K filing and extract the important data. For the fourth quarter of 2016, the company reported record net revenue of $278.3 million, up 2% over the prior year and $23.7 million gained on the sale of excess land at Calder. The company also reported record net income of $26.8 million and record diluted net income per share of $1.60. Overall, the company seems to be growing and pull in numbers that current and potential investors want to be seeing. 

Switching over to the chart using the monthly time frame, we can see that price has done nothing but increase over the last couple of years. However, to recently seems that price is struggling to go higher as this could be the top of the chart in terms of price people are willing to pay for the stock. The chart alone won’t tell the whole story so be sure to use the fundamental information along side the fundamental data. From what I can tell, the chart appears to be healthy and nothing stands out as a red flag.

Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Churchill Downs income statement, its balance sheet, and the statement of cash flows. Potential Churchill Downs investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Churchill Downs investors may use each financial statement separately, they are all related. The changes in Churchill Downs's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Churchill Downs's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Churchill Downs fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Churchill Downs performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Churchill Downs shares is the value that is considered the true value of the share. If the intrinsic value of Churchill is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Churchill Downs. Please read more on our fundamental analysis page.

How effective is Churchill Downs in utilizing its assets?

Churchill Downs Incorporated reports assets on its Balance Sheet. It represents the amount of Churchill resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Churchill Downs aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Hotels, Restaurants & Leisure space. To get a better handle on how balance sheet or income statements item affect Churchill volatility, please check the breakdown of all its fundamentals.

Are Churchill Downs Earnings Expected to grow?

The future earnings power of Churchill Downs involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Churchill Downs factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Churchill Downs stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Churchill expected earnings.

And What about dividends?

A dividend is the distribution of a portion of Churchill Downs earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Churchill Downs dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Churchill one year expected dividend income is about USD0.37 per share.
As of the 29th of March 2024, Dividends Paid is likely to grow to about (25.7 M). In addition to that, Dividend Yield is likely to drop to 0.
Last ReportedProjected for 2024
Dividends Paid-27.1 M-25.7 M
Dividend Yield 0  0 
Dividend Payout Ratio 0.06  0.06 
Dividend Paid And Capex Coverage Ratio(0.93)(0.98)
Investing in stocks that pay dividends, such as stock of Churchill Downs Incorporated, is one of many strategies that are good for long-term investments. Ex-dividend dates are significant because investors in Churchill Downs must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Churchill Downs. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

Is Churchill Downs valued appropriately by the market?

Risks

For a full list of risks, take a look at the most recent 10-K report and that will cover a majority of the risks as well as details on them. For now, here are a couple to keep in mind. First, people have to continue going to their racetracks and betting as that is how the course remains in operation. Arlington is struggling right now with the state budget issue, but will hopefully find relief soon. Secondly, the pressure from animal cruelty and people who oppose the industry will keep the company in unwanted light, so they have to maintain their brand image throughout.

Conclusion

This is a niche that not many people think of for their portfolio, but could add benefits to it. Certainly you have to understand the industry to get how it works, but it’s simple to understand. Be sure to see if your portfolio can handle this type of risk and if you still have questions after, consult and investing professional as they can help point you in the right direction. Again, there is potential here but ensure your portfolio is ready for this addition.

Building efficient market-beating portfolios requires time, education, and a lot of computing power!

The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.

Try AI Portfolio Architect

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Churchill Downs Incorporated. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com