Monarch On line casino & Resort (NASDAQ:MCRI) introduced right now it’s planning to renovate the second resort tower at Atlantis On line casino Resort Spa Reno early subsequent yr and is mulling paying a dividend.
The gaming firm made these declarations together with reporting record-breaking third-quarter outcomes after the shut of US markets. Reno-based Monarch reported earnings per share of $1.41 on income of $133.73 million for the September quarter as adjusted property earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) jumped 28%.
Over the past yr, with the completion of Monarch Black Hawk growth, we now have continued to fine-tune all features of our enterprise and are working extra effectively and successfully than ever earlier than,” stated co-Chairman and CEO John Farahi in a press release.
Monarch owns simply two casino-hotels — its namesake venue in Black Hawk, Colo. and Atlantis in Reno.
Monarch Renewing Reno Focus
Monarch doled out $400 million to reinforce its Colorado venue, a transfer the operator says is paying off by way of rising share in one of many West’s best gaming markets outdoors of Las Vegas. Following some additions to its Reno property, the corporate is trying to do extra at that venue.
“Atlantis continues to ship robust outcomes. Our main focus stays the continued enhancement of the property. Friends’ response to the just lately upgraded and redesigned rooms within the first resort tower has been very constructive,” added Farahi.
Atlantis, by some accounts, is already probably the most extremely rated venue in Reno and that’s a great factor for Monarch as a result of there are new properties and operators in what’s an more and more engaging however aggressive gaming market.
New entrants to the market, together with Bally’s and Century Casinos, may allocate capital to sprucing up acquainted venues in Reno-Tahoe. That might probably lure extra guests to the area within the course of.
Monarch Steadiness Sheet, Dividend Prospects
Monarch ended the third quarter with $33.1 million in money, a $27 million stability on a time period mortgage and no excellent debt tied to a $70 million credit score facility.
Farahi famous the gaming firm is “evaluating a full vary of capital allocation choices, together with potential share repurchases below our current 2.9 million share repurchase authorization and potential dividend.”
Monarch at the moment doesn’t a pay a dividend, however as of late, that’s commonplace within the gaming business. The corporate went public in 1993 and hasn’t paid a quarterly distribution over that point, however doing so may usher in a brand new crowd of traders, significantly as a result of it’s a small-cap inventory. Small-cap equities are often extra unstable than bigger counterparts, however dividends are recognized to blunt a few of that turbulence no matter market capitalization. It’s additionally attainable that Monarch may very well be a takeover goal.
“On the M&A entrance, the listing of ‘appropriate’ acquisition targets stays slim (barring a macro downturn bringing new sellers to the desk), although we imagine MCRI stays a lovely takeout candidate probably presenting a unique avenue for traders to receives a commission. All-told, we see engaging risk-reward at current ranges regardless of macro uncertainty, with possible catalysts for worth discovery within the coming quarters,” stated Stifel analyst Jeffrey Stantial in a be aware out this night.
He upgraded the inventory to “purchase” from “maintain.”