Saturday, April 27, 2013
Kentucky Derby Next Week: Horse Race Stocks Anyone?
The Kentucky Derby, the most notable horserace in the United States, will be held this Saturday, May 4, in Louisville, Kentucky. The Kentucky Derby is the initial race of the trio of races of the Triple Crown of Thoroughbred Racing. It will be followed by the Preakness Stakes and the Belmont Stakes.
Instead of putting your money on a horse race bet, why not put your money in a horse race investment. WallStreetNewsNetwork.com turned up a list of over ten stocks in the horse racing industry, a couple of which pay dividends.
One example is Churchill Downs (CHDN), the host of the Kentucky Derby. This is the holding company of the Churchill Downs Racetrack that originally opened in 1875. It also owns Arlington Park, the Calder Race Course, the Fair Grounds Race Course, and the Trackside Off-Track-Betting Facilities. The stock trades at 22.3 times trailing earnings, 17.1 times forward earnings, and pays a yield of 1.0%.
The company just reported results on April 24. Record revenue of $148.1 million were generated, up 7% versus the prior-year period, along with record EBITDA of $17.9 million, up 3%. According to Robert L. Evans, Chairman and CEO, "While we set revenue and EBITDA records for the first quarter, our Gaming revenues were below our expectations, primarily due to the higher payroll taxes that became effective January 1, and delays in issuing federal and state income tax refunds. In addition, our Online Business revenues underperformed due to our decision to stop taking TwinSpires.com wagers in Illinois effective January 18, as the bill authorizing such wagering was allowed to expire by the state legislature.
"Looking forward, the pre-event metrics for Kentucky Oaks and Derby Week look strong.
"The Board also approved a stock repurchase plan that authorizes the repurchase of up to $100 million in Churchill Downs Incorporated common stock through the end of 2015. This provides a tax-effective way to return capital to shareholders and to offset some of the dilutive effect of equity used in the Company's compensation plans."
Another player in the racehorse filed is Dover Downs Gaming and Entertainment (DDE), which owns Dover Downs Raceway, a harness racing track with pari-mutuel wagering. The company trades at 28.3 times earnings and pays a munificent yield of 4.3%. Revenues were down 21.2% for the latest reported quarter.
Penn National Gaming Inc. (PENN) owns racetracks and off-track wagering facilities in Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Ontario. The stock has a trailing price to earnings ratio of 30.2 and a forward PE of 21.2 but does not pay a dividend.
For a free list of horse racing stocks which you can download, sort and update, go to WallStreetNewsNetwork.com.
Also, if you want a free horse race handicapping program, check out the one at horsetip.com.
Disclosure: Author did not own any of the above at the time the article was written.