How you could win big with these 3 gambling shares

Crown Resorts Ltd (ASX:CWN) and Tatts Group Ltd (ASX:TTS) are 2 of 3 shares that could be worth a punt.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's a commonly held belief that people like to gamble more in tough times as they try to lift themselves out of an unhappy situation.

That could be true, in which case this could make leisure and entertainment (or gambling) stocks some of the best to own in a recession. The following three stocks could be worth a punt at the current prices:

Crown Resorts Ltd (ASX: CWN)

Crown is Australia's largest entertainment and gambling company with a market capitalisation of $9.14 billion.

It has large casinos in Melbourne and Perth, with another planned for Sydney. It could be one of the best stocks to own over the coming years to take advantage of the growth of tourists who want to gamble and stay in the best hotels.

Crown is currently trading at 23x FY17's estimated earnings with a pledged 60c annual partially franked dividend which equates to a yield of 4.78%.

Star Entertainment Group Ltd (ASX: SGR)

This is the owner of The Star casino in Sydney, it has a market capitalisation of $4.58 billion.

This business will also be a beneficiary of the growing number of tourists that are arriving into Australia every year. Sydney Airport Holdings Ltd (ASX: SYD) reports the growing number of international visitors every month and The Star could benefit nicely from the rising passenger numbers once they arrive into Sydney.

Star Entertainment Group is currently trading at 19x FY17's estimated earnings with a grossed-up dividend yield of 3.86%.

Tatts Group Ltd (ASX: TTS)

Tatts is a betting provider and operates a number of lotteries. It currently has a market capitalisation of $6.56 billion.

Management are finding it tough to increase revenue. In its latest report to 31 December 2016 it disclosed that total revenue and other income decreased by 6.9%, which was a big cause in the net profit after tax decreasing by 16.5%.

Tatts is currently trading at 27x FY17's estimated earnings with a grossed-up dividend yield of 5.59%.

Foolish takeaway

I think Crown and Star Entertainment could beat the odds and outperform the market over the next few years. Out of the three, Crown could be the best stock to own with the number of growth projects that it has planned for the next decade.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Crown Resorts Limited and Sydney Airport Holdings Limited. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »