The casino industry digitized its operations significantly last year to remain profitable amid COVID-19-pandemic-driven restrictions. This, along with the reopening of physical casinos made possible with the U.S.’ fast-paced, nationwide vaccination program, we think positions prominent industry players Penn (PENN) and MGM (MGM) well to grow significantly in the coming months. But which of these two stocks is a better buy now? Let’s find out.Penn National Gaming, Inc. (NASDAQ:PENN) and MGM Resorts International (NYSE:MGM) are two established players in the Casino industry. PENN has ownership interests in gaming and racing facilities and video gaming terminal operations, with a focus on slot machine entertainment. MGM owns and operates integrated casino, hotel, and entertainment resorts. It operates through two segments—Domestic Resorts and MGM China (OTC:MCHVY).
A transition from traditional casino tables to electronic gaming platforms has allowed the gambling and entertainment industry to remain profitable amid remote lifestyle and social distancing protocols over the past year. With more than 50% of the U.S. population fully vaccinated now, travel restrictions are gradually being removed. Consequently, luxury hotels and physical casinos are expected to witness increasing foot traffic. And the commercial gambling industry is expected to grow at a 12.9% CAGR over the next five years.
While MGM has gained 165.4% over the past year, PENN has returned nearly 162.4%. In terms of their past six months performance, MGM is a clear winner with 48.7% returns versus PENN’s 10.2%. So, which of these two stocks is a better pick now? Let's find out.