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What are we looking for?

Sustainable dividends from companies revving up for the U.S. sports-betting market.

The screen

This week’s deal between the National Hockey League and MGM Resorts International hints at the coming boom in U.S. sports betting. The NHL will sell MGM its proprietary data, allowing the entertainment giant to better set odds. Still, other industry players also stand to benefit from the increased activity.

Earlier this year, the U.S. Supreme Court upended 26-year-old restrictions on sports betting outside of Nevada.

Many states are expected to allow for in-person sports betting at casinos and racetracks, while others are also likely to include online sports gambling.

Our search started with U.S. casino owners and other gambling stocks with strong growth prospects and dividends.

We then applied our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors:

  • One point for five years of continuous dividend payments – two points for more than five;
  • Two points if it has raised the payment in the past five years;
  • One point for management’s commitment to dividends;
  • One point for operating in non-cyclical industries;
  • One point for limited exposure to foreign-currency rates and freedom from political interference;
  • Two points for a strong balance sheet, including manageable debt and adequate cash;
  • Two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments;
  • One point if the company is a leader in its industry.

Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above-average sustainability; four to six points for those with average sustainability; and one to three points for below-average sustainability.

More about TSI Network

TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor. The TSI Best ETFs for Canadian Investors is the latest. TSI Network is also affiliated with Successful Investor Wealth Management.

What we found

Churchill Downs Inc., owner of the home of the Kentucky Derby, is now jumping into sport betting in a number of states. British-based bookmaker William Hill PLC already has a big presence in Nevada sports betting. It’s quickly expanding across the United States, and is striking promotional deals with the NHL’s New Jersey Devils and Vegas Golden Knights. Las Vegas-based Boyd Gaming Corp. owns casinos across the United States and is well placed in sport betting. MGM’s partnerships include the NBA and WNBA – and now the NHL. It’s also launching big online sports-betting initiatives. Casino operators Wynn Resorts Holdings LLC and Las Vegas Sands Corp. make most of their profits from Asia, but are able to quickly build up their U.S. sports wagering.

We advise investors to do additional research on investments we identify here.

Select sports-betting stocks that pay dividends

Ranking* Company Ticker Div. Sustain. Rating Points Div. Yield % Market Cap. (US$ Bil.) Recent price (US$) 1Y Total Rtn. (%)
1 Las Vegas Sands Corp. LVS-N Above Average 8 5.9 39.9 51.03 -17.0
2 Wynn Resorts Ltd. WYNN-Q Above Average 8 3.1 10.6 100.60 -28.8
3 Churchill Downs Inc. CHDN-Q Above Average 8 0.6 3.3 249.61 21.6
4 William Hill PLC (ADR) WIMHY-OTC Above Average 7 3.5 2.3 10.86 -18.4
5 MGM Resorts Int't MGM-N Above Average 7 1.9 13.6 26.68 -12.7
6 Boyd Gaming Corp. BYD-N Above Average 7 1.0 2.8 26.56 -7.2

Source: Dividend Advisor

*Ranking is determined by TSI Dividend Sustainability Score. Where overall points are the same, analysts considered P/E, dividend yield and industry outlook to decide final placements.

Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/05/24 3:51pm EDT.

SymbolName% changeLast
LVS-N
Las Vegas Sands
-0.18%44.8
WYNN-Q
Wynn Resorts Ltd
-1.11%93.57
CHDN-Q
Churchill Downs IN
-1.36%131.18
MGM-N
MGM Resorts International
-1.79%39.01
BYD-N
Boyd Gaming Corp
-2.65%50.39

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