Three reasons to be positive about Crown Resorts shares
This week's Hot Stock is a hospitality stock, courtesy of Fat Prophets. Odds seem to be improving for Crown Resorts. A new major development in Hong Kong has investors excited for the future.
Crown Resorts (ASX:CWN) Key statistics: Closing share price 16-8-16: $13.290 52-week high: $13.650 52-week low: $13.300 Most recent dividend: 33c Annual dividend yield: 3.93% Franking: 50%
There is in our view a growing list of reasons to be positive on Crown Resorts shares.
With Crown having recently announced a number of strategic initiatives aimed at closing the gap between the company's market and intrinsic value, we now note three key reasons to be upbeat.
These are the resilient performance of Crown's core domestic business, the strategic upside from recent initiatives and positive anecdotes from Macau.
Crown's shares are currently trading at around 23.9 times the 2015-16 earnings estimate and offering a dividend yield of 4.34%.
While these metrics are by no means cheap, we expect a looming inflection point in Macau earnings, valuation upside from the demerger of select international assets and the creation of an Australian property trust to more than justify the current price-earnings premium.