Crown Resorts Ltd (ASX: CWN) is the owner and operator of casinos and hotels in Australia and around the world. With a market capitalisation around $9.5 billion it is one of the 50 biggest companies listed in Australia. I believe it has the potential to grow strongly from the current share price of $12.93.

  • Proposal to split into three different entities  

Crown Resorts has plans for a possible IPO of a 49% interest in a property trust, which would own some of Crown’s Australian hotels. Crown has also proposed a demerger of its international investments into a separately listed holding company. Demergers often unlock additional value for shareholders, allowing the management of each entity to focus on their core business.

Sometimes a spin-off can lead to both entities’ shares performing well. A good example of this is Crown’s main rival, The Star Entertainment Group Limited (ASX: SGR), which was separated from Tabcorp Holdings Limited (ASX: TAH). Since the 2011 spin-off Tabcorp shares are up over 70% and Star Entertainment shares are up over 47%.

  • Development pipeline

Crown Resorts has a number of projects in the pipeline. The Crown Towers building in Perth is expected to open in December 2016. It will include 500 luxury hotel rooms and suites as well as villas, private gaming salons, restaurants, bars and more.

Another proposed project is the Queensbridge Hotel Tower in Melbourne, which will contain a six-star hotel with 388 rooms and 700 luxury apartments. Considering Crown’s high hotel occupancy rates and expensive prices, it is easy to conclude that these two developments will boost earnings.

Crown’s Sydney project is also very exciting; a proposed six-star hotel containing 350 luxury rooms and suites, however, it has been beset with delays. The NSW Planning Assessment Commission (PAC) finally approved Crown’s Sydney plans on 28 June 2016, subject to a number of modifications and conditions. Then, on 2 August 2016, a legal challenge was issued by the Millers Point Fund Incorporated against the PAC. Crown has indicated it will vigorously defend these proceedings. Assuming Crown can win the case, the Sydney project is another big tick for its hotel division.

Further afield, Crown is also looking at constructing a casino in Las Vegas. This is still in the design and pre-development phase. Las Vegas remains the gambling centre of the United States, so it’s no surprise that Crown wants a slice of that action.

  • Asian tourism

Sydney Airport’s (ASX: SYD) monthly international passenger update can attest to the growing number of tourists arriving from Asia. Its August 2016 update revealed international arrivals increased by 7.6% compared to August 2015. The number of tourists from Asia is expected to grow considerably in the coming years. Many of these tourists will travel to Australia’s major cities, stay at luxury hotels and gamble at casinos (such as Crown Resorts).

Is now the time to buy?

With a P/E Ratio of 22.4 (Source: Commsec), Crown is trading at a similar level to Star Entertainment Group’s P/E of 22.6. However, Crown has a considerably higher dividend yield (partially franked) of 5.53%, whereas Star Entertainment Group has a fully franked yield of 2.2%.

Analysts forecast Crown will grow earnings per share to 69.8cps in FY17 and 74.6cps in FY18. This implies Crown is trading at 17x FY18 earnings. At $12.93 I think its shares offer good value for the long-term investor, Crown Resorts is one to keep an eye on.

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Motley Fool contributor Tristan Harrison has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.