Is Echo Entertainment Group Ltd still your best bet in casino stocks?

Echo Entertainment Group Ltd (ASX:EGP) has reported a solid profit but it could already be reflected in the share price.

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Echo Entertainment Group Ltd (ASX: EGP) which operates The Star Casino in Sydney as well as the Treasury Casino in Brisbane and Jupiters Casino on the Gold Coast has reported a solid set of full year results for the financial year (FY) ending 30 June 2015.

Here's what investors need to know:

  • Normalised gross revenue was up 20.6% to $2.3 billion thanks to good domestic gaming and strong international VIP rebate business revenues
  • Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) leapt 24.1% to $521 million
  • Normalised net profit after tax (NPAT) soared 52.2% to $219 million reflecting a strong operating performance and lower interest expense due to lower debt levels
  • The full year dividend will total 11 cents per share

Outlook positive

While this time a year ago investors were fretting over the effects of an entry by the James Packer-controlled Crown Resorts Ltd (ASX: CWN) into the Sydney market; this year investors have arguably factored in the increased competition in NSW and are breathing a sigh of relief that Echo has successfully won the bid process for the Queen's Wharf development in Brisbane.

Buy, Hold, Sell?

For some investors it could now be more of a question of which casino stock represents the greatest upside from this point forward. SKYCITY Entertainment Group Limited-Ord (ASX: SKC) has also reported an impressive uplift in full year profit, while Crown is yet to report.

Over the past 12 months, Echo's shares have rallied nearly 60%, SKYCITY's share price has climbed 16%, while Crown's share price is down over 8%. For value investors, arguably Crown's shares could currently be their best bet.

Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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