Wynn Resorts Is Largely Dependent upon Tourism and the Health of the Economy

Wynn Resorts is one of the most known names on the strip in Las Vegas, as they attract poker players and hotel guests alike. This industry has the ability to boom while the economy is doing well, but as soon as people notice a slow down, they will stop spending money on items such as travel and gambling. With that being said, this could be a good company to ride the ups and downs of the business cycle. Not let us take a look at their most recent numbers and see if they are doing well fundamentally. 

Published over a year ago
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Reviewed by Raphi Shpitalnik

You can take a look at one of the recent 8-K reports for a full understanding of their latest quarter, but here are a few highlights to take note of. Net revenues were $1.11 billion for the third quarter of 2016, which was an increase of 11.4% from the same period of 2015. Also, the company approved a cash dividend of $0.50 per share, which was payable in November of 2016. The fact the company can pay dividends is a good sign for potential investors. 

Switching gears to the chart, we can see that price has fallen quite a bit from the highs of 2014. Right now price is off that run down and is stuck around the $91 area. It pushed off a resistance area around the same mark, which was used as support in two prior locations. Right now, if you believe the company is going to produce a gain in price, it would be a good time to enter as it is still near the recent lows. However, this could be a signal that they company is slowing down a bit so be sure to complete careful research before investing.

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 Wynn Resorts income statement, its balance sheet, and the statement of cash flows. Potential Wynn Resorts investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Wynn Resorts investors may use each financial statement separately, they are all related. The changes in Wynn Resorts's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Wynn Resorts'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 Wynn Resorts fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Wynn Resorts performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Wynn Resorts shares is the value that is considered the true value of the share. If the intrinsic value of Wynn 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 Wynn Resorts. Please read more on our fundamental analysis page.

How effective is Wynn Resorts in utilizing its assets?

Wynn Resorts Limited reports assets on its Balance Sheet. It represents the amount of Wynn resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Wynn Resorts 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 Wynn volatility, please check the breakdown of all its fundamentals.

Are Wynn Resorts Earnings Expected to grow?

The future earnings power of Wynn Resorts involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Wynn Resorts factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Wynn Resorts 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 Wynn expected earnings.

And What about dividends?

A dividend is the distribution of a portion of Wynn Resorts 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. Wynn Resorts 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. Wynn one year expected dividend income is about USD0.33 per share.
As of the 24th of April 2024, Dividends Paid is likely to drop to about 80.5 M. In addition to that, Dividend Yield is likely to drop to 0.01.
Last ReportedProjected for Next Year
Dividends Paid84.7 M80.5 M
Dividend Yield 0.01  0.01 
Dividend Payout Ratio 0.12  0.11 
Dividend Paid And Capex Coverage Ratio(2.86)(2.71)
Investing in stocks that pay dividends, such as stock of Wynn Resorts Limited, is one of many strategies that are good for long-term investments. Ex-dividend dates are significant because investors in Wynn Resorts 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 Wynn Resorts. 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.

Wynn Resorts Gross Profit

Wynn Resorts Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Wynn Resorts previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Wynn Resorts Gross Profit growth over the last 10 years. Please check Wynn Resorts' gross profit and other fundamental indicators for more details.

Breaking it down a bit more

Risks

Being in the resort and hotel business certainly has its unique set of risks. Take a look at the company’s most recent 10-K filing to review the full list of risks, but here are just some to keep mind. The company cites the business is sensitive to reduction in discretionary consumer and corporate spending. As mentioned in the introduction, if people have a worry they might lose cash flow, then they are no longer going to travel and stay at hotels. Also, the company may have unsuccessful projects, which is normal but it shouldn’t be to the point where it negatively affects the company and the stock price.

Conclusion

I like this company when another recession occurs, because it will get beat down price wise, but when people begin spending again, the price will rise and you can capture a large move. All in all, I would keep this on your radar and if you have any questions, be sure to consult an investing professional to ensure it will complement your portfolio.

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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 Wynn Resorts Limited. Please refer to our Terms of Use for any information regarding our disclosure principles.

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