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Category: Stock Market and Gaming and Leisure
Date: 22 February 2020 Stock Price: $50.30 We take a look at the 4th quarter earnings report of their 2019 fiscal year of Gaming and Leisure Properties, a company that owns gaming related facilities and and leases them out to gaming operators.
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About Gaming and Leisure Properties
Gaming and Leisure Properties, Inc. (“GLP”) is a self-administered and self-managed Pennsylvania real estate investment trust engaged in acquiring, financing, and owning real property to be leased to gaming operators in "triple net" lease arrangements. GLP’s portfolio consists of 44 gaming and related facilities, which are geographically diversified across 16 states. GLP intends to grow its portfolio by aggressively pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. GLP also intends to diversify its portfolio over time by acquiring properties outside the gaming industry.
Overview of Gaming and Leisure Properties 4th quarter 2019 earnings report
The data below refers to the latest quarter's data (unless specified otherwise)
- Total revenues: $288.984 million (down from $303.317 million for the same quarter of the previous year)
- Total revenues decreased by -4.7% over the last 12 months
- Operating expenses: $100.728 million (down from $179.433 million for the same quarter of the previous year)
- Operating expenses decreased by -43.9% over the last 12 months
- Net income: $114.291million (up from $45.931 million for the same quarter of the previous year)
- Diluted earnings per share: $0.53 (up from $0.21 for the same quarter of the previous year)
- PE ratio of Gaming and Leisure Properties: 27.8
- Dividend declared: $0.70
- Dividend yield of Gaming and Leisure Properties: 5.6%
- Number of shares in issue: 215.962 million (up from 215.066 million for the same period of the previous year)
- Cash and cash equivalents: $26.823 million
- Cash and cash equivalents per share: $0.124
- Cash and cash equivalents makes up 0.24% of Gaming and Leisure Properties' market capital
- Cash and cash equivalents makes up 0.32% of Gaming and Leisure Properties' total assets
- Total stockholders equity in Gaming and Leisure Properties: $2.074 billion
- Stockholders equity per share in Gaming and Leisure Properties: $9.60
- Gaming and Leisure Properties is trading at 5.23 times its stockholders equity per share which is outside the expected range of between 2 and 4 times that most firms tend to trade at
Gaming and Leisure (NASDAQ: GLPI) management commentary on 4th quarter 2019 earnings
WYOMISSING, PA — February 20, 2020 — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) today announced results for the quarter ended December 31, 2019. On a year-over-year basis, fourth quarter income from operations grew 52.0%, net income increased 148.8%, Adjusted EBITDA increased 1.0% and funds from operations (“FFO”) and adjusted funds from operations (“AFFO”) rose 73.3% and 3.9%, respectively. The fourth quarter yearover-year financial growth reflects GLPI’s October 15, 2018 acquisition of the real property assets operated by Eldorado Resorts, Inc. (“ERI”) and the impact in the fourth quarter of 2018 of a non-cash $59.5 million goodwill impairment charge.
“The fourth quarter concluded what was another strong year for GLPI and our shareholders, as we generated durable income from our best-in-class regional gaming portfolio, strengthened the Company's financial position and increased our return of capital to shareholders,” said Chairman and Chief Executive Officer Peter Carlino. “In 2019, we delivered a total shareholder return of over 42%, as our leading diversified portfolio of regional gaming assets, managed by the top operators in the industry, gains growing attention and appreciation in the capital markets for generating one of the triple-net REIT sector's most stable cash flow streams. We remain focused on opportunistically identifying and pursuing portfolio enhancing accretive transactions that meet our stringent underwriting requirements while prudently managing our balance sheet and capital structure. The GLPI team remains committed to furthering the Company's long-term record of driving attractive total shareholder returns and maximizing value in 2020 and beyond.”
“The fourth quarter concluded what was another strong year for GLPI and our shareholders, as we generated durable income from our best-in-class regional gaming portfolio, strengthened the Company's financial position and increased our return of capital to shareholders,” said Chairman and Chief Executive Officer Peter Carlino. “In 2019, we delivered a total shareholder return of over 42%, as our leading diversified portfolio of regional gaming assets, managed by the top operators in the industry, gains growing attention and appreciation in the capital markets for generating one of the triple-net REIT sector's most stable cash flow streams. We remain focused on opportunistically identifying and pursuing portfolio enhancing accretive transactions that meet our stringent underwriting requirements while prudently managing our balance sheet and capital structure. The GLPI team remains committed to furthering the Company's long-term record of driving attractive total shareholder returns and maximizing value in 2020 and beyond.”
During the 2019 fourth quarter, GLPI shareholders received a quarterly cash dividend of $0.70 per share, marking a 2.9% increase over the comparable period in 2018. GLPI's full year 2019 dividends of $2.74 represents growth of 6.61% compared with full year 2018 dividends and GLPI's annualized fourth quarter dividend of $2.80 marks a 5.31% compound annual growth rate since the Company's formation. The current annual cash dividend of $2.80 represents a yield of 5.7% based on the $48.92 per share closing price of the Company's stock on February 19, 2020.
Portfolio Update
GLPI's primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of December 31, 2019, GLPI's portfolio consisted of interests in 44 gaming and related facilities, including wholly-owned and operated Hollywood Casino Baton Rouge and Hollywood Casino Perryville, which are referred to as the "TRS Properties", the real property associated with 32 gaming and related facilities operated by Penn National Gaming, Inc. (“PENN”), the real property associated with 5 gaming and related facilities operated by ERI, the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (“BYD”) (including one mortgaged facility) and the real property associated with the Casino Queen in East St. Louis, Illinois. These facilities are geographically diversified across 16 states and contain approximately 22.1 million square feet.
Guidance
Portfolio Update
GLPI's primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of December 31, 2019, GLPI's portfolio consisted of interests in 44 gaming and related facilities, including wholly-owned and operated Hollywood Casino Baton Rouge and Hollywood Casino Perryville, which are referred to as the "TRS Properties", the real property associated with 32 gaming and related facilities operated by Penn National Gaming, Inc. (“PENN”), the real property associated with 5 gaming and related facilities operated by ERI, the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (“BYD”) (including one mortgaged facility) and the real property associated with the Casino Queen in East St. Louis, Illinois. These facilities are geographically diversified across 16 states and contain approximately 22.1 million square feet.
Guidance
- Reported range of revenue from real estate of approximately $1,065.6 to $1,067.7 million for the year and $259.4 million for the first quarter
- High range includes 2020 escalators for PENN, Meadows, ERI and BYD whereas low range includes only ERI;
- Assumes free cash flow after dividends and borrowings on the revolver are used to pay the $215.2 million balance of the Senior Unsecured Notes Due November 2020 and no other refinancing transactions;
- Adjusted EBITDA from the TRS Properties of approximately $29.1 million for the year and $8.0 million for the first quarter;
- Blended income tax rate at the TRS Properties of 26%;
- LIBOR is based on the forward yield curve; and
- The basic share count is approximately 215.1 million shares for the year and the first quarter and the fully diluted share count is approximately 215.6 million shares for the year and 215.5 million shares for the first quarter.
Gaming and Leisure Properties (NASDAQ: GLPI) stock price history
The image below obtained from Google, shows the stock price history of Gaming and Leisure Properties over the last 5 years. And its been a very volatile but pretty good time for Gaming and Leisure Properties. 5 years ago the stock of Gaming and Leisure Properties was trading at around $33.90 a stock and its currently trading at $50.30 a stock. That's a decent return of 48.3% provided by Gaming and Leisure Properties stockholders over the last 5 years.
The stock of Gaming and Leisure Properties is trading at a lot closer to its 52 week high of $50.99 than it is to its 52 week low of $35.39 a stock, which to us is a clear indication that the short term sentiment and momentum of Gaming and Leisure Properties stock is very positive at this point in time,
The stock of Gaming and Leisure Properties is trading at a lot closer to its 52 week high of $50.99 than it is to its 52 week low of $35.39 a stock, which to us is a clear indication that the short term sentiment and momentum of Gaming and Leisure Properties stock is very positive at this point in time,
Recent coverage of Gaming and Leisure Properties
The extract below discusses the latest regarding Gaming and Leisure Properties (NASDAQ: GLPI) as obtained from Nasdaq.com
Gaming and Leisure Properties (GLPI) came out with quarterly funds from operations (FFO) of $0.87 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.84 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this real estate investment trust would post FFO of $0.85 per share when it actually produced FFO of $0.87, delivering a surprise of 2.35%. Over the last four quarters, the company has surpassed consensus FFO estimates two times.
Gaming and Leisure Properties, which belongs to the Zacks REIT and Equity Trust - Other industry, posted revenues of $288.98 million for the quarter ended December 2019, surpassing the Zacks Consensus Estimate by 0.34%. This compares to year-ago revenues of $303.32 million. The company has topped consensus revenue estimates just once over the last four quarters.
Read the full article here
Gaming and Leisure Properties (GLPI) came out with quarterly funds from operations (FFO) of $0.87 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.84 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this real estate investment trust would post FFO of $0.85 per share when it actually produced FFO of $0.87, delivering a surprise of 2.35%. Over the last four quarters, the company has surpassed consensus FFO estimates two times.
Gaming and Leisure Properties, which belongs to the Zacks REIT and Equity Trust - Other industry, posted revenues of $288.98 million for the quarter ended December 2019, surpassing the Zacks Consensus Estimate by 0.34%. This compares to year-ago revenues of $303.32 million. The company has topped consensus revenue estimates just once over the last four quarters.
Read the full article here
Gaming and Leisure Properties (NASDAQ: GLPI) stock valuation
So what do we value Gaming and Leisure Properties' stock at after the release of their 4th quarter 2019 earnings and the fiscal guidance provided for the full fiscal 2020? Based on Gaming and Leisure Properties earnings report and fiscal guidance provided our valuation models provides a target (full value) price of Gaming and Leisure Properties at $36.60 a stock (up strongly from our 3rd quarter 2019 earnings report valuation of Gaming and Leisure Properties). We therefore believe that the stock of Gaming and Leisure Properties' is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $36.60. Therefore we believe a good entry point into Gaming and Leisure properties stock is at $32.90 or below. We expect the stock of Gaming and Leisure Properties to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
We therefore rate Gaming and Leisure Properties stock as a sell
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $36.60. Therefore we believe a good entry point into Gaming and Leisure properties stock is at $32.90 or below. We expect the stock of Gaming and Leisure Properties to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
We therefore rate Gaming and Leisure Properties stock as a sell
Next earnings release of Gaming and Leisure Properties
It is expected that Gaming and Leisure Properties will publish their 1st quarter 2020 earnings report in late May 2020