MGM Resorts – a global leader in hospitality and entertainment



Business overview

MGM Resorts (MGM) was founded in 1986. It’s based in Nevada. It’s one of the leading global hospitality and entertainment companies. MGM develops, builds, and operates destination resorts. MGM offers accommodations and dining, entertainment, meeting and convention facilities, retail, and gaming.

MGM Resorts is traded on the NYSE under the ticker symbol “MGM.” To learn more about MGM read Must-know: An investors’ guide to MGM Resorts International.

It’s important to note that MGM:

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  • offers a range of slots, table games, and race and sports book wagering
  • operates a portfolio of destination resort brands—including Bellagio, MGM Grand, Mandalay Bay, and The Mirage
  • owns and operates 15 properties and has 50% investments in three other properties
  • has 51% interest in MGM China Holdings

MGM operates through its wholly owned domestic resorts and MGM China. The above chart shows that for 2014, MGM generated 63% of its total revenue from its domestic operations. It generated 33% of its revenue from its Macau operations.

Currently, MGM is developing an integrated casino, hotel, and entertainment complex in the Cotai Strip—known as MGM Cotai. It will include up to 1,600 hotel rooms, 500 gaming tables, and 2,500 slots. The total estimated project budget is $2.9 billion. The project is expected to open in early 2016.

Competitors and series overview

Other companies in the industry include Las Vegas Sands (LVS), Wynn Resorts (WYNN), and Melco Crown Entertainment (MPEL). Investors who want to have diversified exposure in leisure companies may invest in ETFs like the Consumer Discretionary Select Sector SPDR Fund (XLY) and the VanEck Vectors Gaming ETF (BJK).

In this series, we’ll discuss MGM’s operating performance. We’ll see why its liquidity improved during 4Q14. Wall Street analysts are bullish on MGM even though its revenue and EBITDA (earnings before interest, tax, depreciation, and amortization) declined. So, why does MGM’s share price have huge upside potential?


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