MGM Resorts

Methodology

MGM's earnings are volatile due to Las Vegas visitation cycles, convention calendars, and property development projects that impact near-term profitability. The asset-heavy model creates depreciation and interest expenses that distort cash generation. Use normalized EBITDA and focus on property-level cash flows rather than GAAP earnings for more reliable valuation insights.

Methodology

PEG analysis is problematic for MGM given extreme earnings swings from pandemic impacts, property renovations, and regional gaming competition. Growth rates can be misleading during recovery periods or property openings. Focus on EV/EBITDA multiples and compare property-level returns rather than relying on earnings-based growth metrics for this capital-intensive gaming operator.

Methodology

MGM has reinstated dividends after pandemic suspension, though payout levels remain modest given capital needs for property investments and debt management. Dividend sustainability depends on Las Vegas trends and operational execution. When paying, the yield adds some value though capital appreciation potential matters more for this cyclical gaming company.