NEW YORK, NY--(Marketwire - Nov 20, 2012) - Gaming stocks received a boost last Friday after Penn National Gaming Inc. announced breakup plans to create the first casino-focused REIT. Analysts have suggested that other gaming companies may follow suit as it would help free up capital. "This could be a trend within the gaming sector to distribute profits on a more tax efficient basis," said Joseph Greff, a JPMorgan Chase & Co. analyst. The Paragon Report examines investing opportunities in the Resorts & Casinos Industry and provides equity research on Las Vegas Sands Corp. (NYSE: LVS) and Pinnacle Entertainment, Inc. (NYSE: PNK).
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Penn National will break up into two public companies and place a majority of their properties, at least 17, into a new real estate investment trust. Shareholders of Penn will a dividend of $5.35 a share in addition to stock in the newly established REIT. The breakup is expected to occur, pending regulatory approval, during the second half of 2013.
"This process will unlock the tremendous value of our real estate portfolio," Chairman and CEO Peter Carlino said on a conference call. "This is just strictly our view of how we can best take the assets we have and make the most of them."
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Las Vegas Sands currently offers investors an annual dividend of $1.00 per share for a yield of approximately 2.4 percent. In a recent conference call the chairman and CEO of Las Vegas Sands, Sheldon Adelson, stated that he would consider the possibility of breaking up the casino from the company's retail properties, according Bloomberg.
Pinnacle Entertainment owns and operates seven casinos, located in Louisiana, Missouri, Indiana, and a racetrack in Ohio. In addition, Pinnacle holds a 26% ownership stake in Asian Coast Development Ltd., an international development and real estate company currently developing Vietnam's first large-scale integrated resort on the Ho Tram Strip.
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