Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks in various market conditions, focusing on undervalued stocks for potential profits [2][3] Company Analysis: Boyd Gaming (BYD) - Boyd Gaming is currently rated as Zacks Rank 1 (Strong Buy) and has an "A" grade for Value, indicating strong investment potential [4] - The stock is trading at a P/E ratio of 12.81, significantly lower than the industry average P/E of 33.29, suggesting it may be undervalued [4] - Boyd Gaming's Forward P/E has fluctuated between 8.50 and 12.90 over the past year, with a median of 10.91, indicating stable valuation metrics [4] - The P/B ratio for Boyd Gaming is 5.22, which is favorable compared to the industry's average P/B of 13.78, further supporting the undervaluation thesis [5] - Over the past 52 weeks, BYD's P/B has ranged from 2.90 to 5.22, with a median of 4.00, reflecting its solid market position [5] - Overall, Boyd Gaming appears to be undervalued based on key financial metrics and has a strong earnings outlook, making it an attractive value stock at this time [6]

Core Insights - Wall Street is experiencing a strong rally, driven by solid corporate earnings, resilient economic data, the AI boom, and retail investor enthusiasm, despite concerns over trade policy and Federal Reserve actions [1] Dividend Growth Strategy - Dividend investing is gaining traction as it provides consistent income, especially in uncertain markets, with a focus on stocks that have a strong history of year-over-year dividend growth leading to higher returns [2][4] - Stocks with a solid dividend growth history are typically mature companies, offering downside protection and acting as a hedge against market volatility [4][5] - Selected dividend growth stocks include Boyd Gaming Corporation, TE Connectivity, UGI Corporation, NetEase Inc., and Garmin Ltd., which show strong earnings revisions and growth potential [3][9] Stock Selection Criteria - Stocks selected for dividend growth should have a 5-Year Historical Dividend Growth greater than zero, indicating a solid dividend growth history [6] - Additional criteria include 5-Year Historical Sales Growth and EPS Growth greater than zero, ensuring a strong record of revenue and earnings growth [7] - Valuation metrics such as Price/Cash Flow less than the industry average and a 52-Week Price Change greater than the S&P 500 are also important for stock selection [8] Company Profiles - **Boyd Gaming Corporation (BYD)**: A multi-jurisdictional gaming company with a positive earnings estimate revision of $0.31 and an earnings surprise of 9.12% over the past four quarters, holding a Zacks Rank 1 and a Growth Score of A [10][11] - **TE Connectivity (TEL)**: A global technology company with a solid earnings estimate revision of $0.22 and an estimated growth of 12.30%, also holding a Zacks Rank 1 and a Growth Score of B [11][12] - **UGI Corporation (UGI)**: A holding company for energy products with an estimated earnings growth rate of 2.29% and an average earnings surprise of 75.67%, holding a Zacks Rank 2 and a Growth Score of B [13] - **NetEase Inc. (NTES)**: An Internet technology company with a positive earnings estimate revision and an estimated earnings growth rate of 20.14%, holding a Zacks Rank 2 and a Growth Score of A [14] - **Garmin Ltd. (GRMN)**: An OEM of navigation equipment with a positive earnings estimate revision of $0.03 and an estimated earnings growth rate of 7.85%, holding a Zacks Rank 2 and a Growth Score of B [15]

Core Insights - Boyd Gaming Corporation has completed the sale of its 5% equity interest in FanDuel Group to Flutter Entertainment for cash proceeds of $1.758 billion [1][2] - The company plans to use the proceeds to repay existing debt and continue its strategy of investing in properties, pursuing growth opportunities, and returning capital to shareholders while maintaining a strong balance sheet [2] Company Overview - Boyd Gaming Corporation, celebrating its 50th anniversary in 2025, operates 28 gaming entertainment properties across 10 states and manages a tribal casino in northern California [4] - The company also owns and operates Boyd Interactive, a B2B and B2C online casino gaming business, and prides itself on providing outstanding entertainment experiences and customer service [4]

Financial Performance - Total revenues for Q2 2025 increased by $66.5 million, or 6.9%, to $1,034.0 million compared to Q2 2024[144] - Operating income for Q2 2025 increased by $15.3 million, or 6.7%, to $242.4 million compared to Q2 2024[146] - Net income for Q2 2025 increased by $10.5 million to $150.4 million, despite a $7.6 million increase in interest expense[149] - Total revenues for the six months ended June 30, 2025, increased by $97.5 million, or 5.1%, to $2,025.6 million compared to the prior year[145] - Total revenues for the three months ended June 30, 2025, increased to $1,034.0 million, a 6.9% increase from $967.5 million in the prior year[163] - Adjusted EBITDAR for the three months ended June 30, 2025, increased by $3.5 million, or 3.2%, compared to the prior year[167] - Adjusted EBITDAR increased by $5.2 million and $8.0 million for the three and six months ended June 30, 2025, respectively, primarily due to revenue growth from Boyd Interactive[176] - The company reported revenues of $1,965.7 million and net income of $722.9 million for the six months ended June 30, 2025[210] Revenue Breakdown - Online revenue increased by $43.1 million in Q2 2025, driven by $30.4 million in reimbursements of gaming taxes and a $10.7 million increase from Boyd Interactive's operations[144] - Gaming revenues rose by $20.6 million, or 3.2%, in Q2 2025, with a slot handle increase of 3.6% and a table game hold increase of 7.1%[144] - Gaming operations contributed approximately 65% of total revenues for Q2 2025, down from 67% in Q2 2024[151] - Online revenues increased by $66.5 million for the six months ended June 30, 2025, compared to the prior year, driven by a $44.0 million increase in reimbursements and a $21.6 million increase from Boyd Interactive's operations[175] - Total revenues for Managed & Other increased by $3.4 million and $6.3 million for the three and six months ended June 30, 2025, respectively, with Adjusted EBITDAR increasing by $2.8 million and $5.4 million[177] Expenses and Costs - Selling, general and administrative expenses as a percentage of revenues were 10.6% for Q2 2025, down from 10.9% in Q2 2024, reflecting improved revenue performance[179] - Depreciation and amortization expenses increased to $70.0 million for Q2 2025 from $65.7 million in Q2 2024, attributed to the new land-based casino and hotel renovations[182] - Interest expense increased by $6.8 million, or 15.9%, for Q2 2025 compared to the prior year, primarily due to a $638.8 million increase in the weighted average debt balance[189] Cash Flow and Capital Expenditures - Cash and cash equivalents were $320.1 million as of June 30, 2025, compared to $316.7 million at the end of 2024, with a working capital deficit of $88.8 million[192] - Net cash provided by operating activities was consistent at $461.4 million for the six months ended June 30, 2025, compared to $463.8 million in 2024[197] - Net cash outflows for investing activities totaled $375.9 million for the six months ended June 30, 2025, primarily due to capital expenditures of $294.3 million[199] Debt and Financing - As of June 30, 2025, the total outstanding principal amounts under the Credit Facility increased to $1,688.1 million from $1,300.3 million as of December 31, 2024, reflecting an increase of $387.8 million[204] - The blended interest rate for outstanding borrowings under the Credit Facility was 6.1% as of June 30, 2025[205] - The company anticipates a remaining contractual availability under the Credit Facility of $485.9 million as of June 30, 2025[204] - As of June 30, 2025, long-term variable-rate borrowings accounted for approximately 47.0% of total long-term debt[233] - A 100 basis point change in interest rates would result in an annual interest cost change of approximately $16.9 million on variable-rate borrowings[233] Strategic Initiatives - The company is focused on strategic growth opportunities, including enhancing existing properties and expanding online gaming offerings[139] - The company plans to spend approximately $250 million annually for ongoing refurbishment and maintenance, with an additional $100 million allocated for hotel renovation projects in 2025[219] - A new casino, Cadence Crossing, is expected to be constructed with a budget of $100 million, featuring 450 slots and several restaurants, replacing the existing Jokers Wild casino[220] - The company is expanding its portfolio with a $750 million resort development in Norfolk, Virginia, with plans to open a transitional casino in late 2025 and the full resort in late 2027[221] Market and Risk Factors - The company expects continued competition in the gaming market, including the expansion of online gaming and sports betting[235] - Future trends affecting the gaming industry are anticipated to influence growth opportunities and merger and acquisition activity[235] - The company is focused on maintaining the integrity of its information technology systems and compliance with government regulations[235] - There have been no material changes in exposure to market risks since the last annual report filed on February 21, 2025[233] - The company does not hold market risk sensitive instruments for trading purposes, primarily facing interest rate risk and commodity price exposure[232] - Foreign currency exchange risk is limited due to minimal cash held in Canadian bank accounts, with a potential 2x fluctuation in the USD/CAD exchange rate having negligible impact[232] - The majority of purchases for operations and construction projects are from US-based suppliers, mitigating exposure to commodity prices and tariffs[232]

The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days. Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the st ...

Core Insights - Boyd Gaming reported revenue of $1.03 billion for the quarter ended June 2025, reflecting a year-over-year increase of 6.9% and exceeding the Zacks Consensus Estimate of $980.29 million by 5.48% [1] - The company's EPS for the quarter was $1.87, up from $1.58 in the same quarter last year, surpassing the consensus EPS estimate of $1.67 by 11.98% [1] Revenue Performance - Online revenue reached $173.05 million, significantly above the six-analyst average estimate of $139.48 million, marking a year-over-year increase of 33.2% [4] - Downtown Las Vegas revenue was $55.25 million, slightly below the estimated $56.1 million, representing a decline of 4.2% year-over-year [4] - Revenue from the Midwest and South segment was $540.08 million, exceeding the average estimate of $531.53 million, with a year-over-year increase of 3.5% [4] - Managed & Other segment revenue was $36.53 million, surpassing the estimate of $34.94 million, reflecting a year-over-year increase of 10.4% [4] - Las Vegas Locals revenue was $229.09 million, above the estimated $221.91 million, with a year-over-year increase of 1.8% [4] Adjusted EBITDAR Analysis - Adjusted EBITDAR for Online was $22.24 million, exceeding the estimate of $18.72 million [4] - Adjusted EBITDAR for Managed & Other was $25.96 million, above the average estimate of $24.01 million [4] - Adjusted EBITDAR for Corporate expense was -$23.87 million, slightly better than the estimate of -$24.38 million [4] - Adjusted EBITDAR for Downtown Las Vegas was $19.41 million, below the average estimate of $20.91 million [4] - Adjusted EBITDAR for Midwest and South was $201.4 million, exceeding the estimate of $195.56 million [4] - Adjusted EBITDAR for Las Vegas Locals was $112.71 million, above the average estimate of $105.06 million [4] Stock Performance - Boyd's shares have returned +6.9% over the past month, outperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Boyd Gaming reported quarterly earnings of $1.87 per share, exceeding the Zacks Consensus Estimate of $1.67 per share, and up from $1.58 per share a year ago, representing an earnings surprise of +11.98% [1] - The company achieved revenues of $1.03 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.48%, compared to revenues of $967.51 million in the same quarter last year [2] - Boyd has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Group 2 - Boyd's stock has increased approximately 15.1% since the beginning of the year, outperforming the S&P 500's gain of 8.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the next quarter is $1.44 on revenues of $850.45 million, and for the current fiscal year, it is $6.50 on revenues of $3.7 billion [7] Group 3 - The Zacks Industry Rank indicates that the Gaming industry is currently in the top 33% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Bally's, another company in the Gaming industry, is expected to report a quarterly loss of $0.23 per share, with a year-over-year change of +72.3%, and revenues projected at $653.85 million, up 5.2% from the previous year [9]

Financial Data and Key Metrics Changes - For the second quarter, revenues excluding tax pass-through amounts grew by 4%, while EBITDAR also increased by 4% to $358 million, marking the strongest year-over-year growth in over three years [7][21] - Property level margins exceeded 40%, a level consistently achieved since 2021 [7][23] - Total leverage at the end of the second quarter was approximately 2.8 times, expected to reduce to below 2 times post-FanDuel transaction [22][19] Business Line Data and Key Metrics Changes - The Las Vegas Local segment reported its first year-over-year revenue and EBITDAR growth in over two years, maintaining segment margins of nearly 50% [8] - The Midwest and South segment achieved revenue and EBITDAR gains of over 3%, marking its highest quarterly performance in nearly three years [11] - The online segment saw revenue and EBITDA increases driven by Boyd Interactive and modest growth from market access agreements [12] Market Data and Key Metrics Changes - Southern Nevada's employment and average weekly wages increased by over 5% year-over-year, contributing to a positive economic outlook [9] - The Las Vegas Strip experienced softer demand trends, but local economic strength remains [8][10] - The Downtown Las Vegas segment showed stable performance despite challenging comparisons from the previous year [10] Company Strategy and Development Direction - The company plans to use proceeds from the FanDuel transaction to pay down debt, invest in properties, pursue growth opportunities, and return capital to shareholders [5][6][19] - Ongoing capital investments include hotel renovations and new developments, with a total capital expenditure projection of $600 million to $650 million for the year [24][18] - The company remains committed to a balanced approach to capital allocation, focusing on both growth investments and shareholder returns [33][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Southern Nevada economy and the prospects for the locals business, citing positive economic indicators [10] - The promotional environment has remained stable, with no heightened promotional activities noted in key markets [42][43] - Management indicated that while there is flexibility for future investments, they will remain disciplined in capital allocation decisions [36][39] Other Important Information - The company repurchased $105 million in stock during the second quarter and plans to increase its share repurchase program to $150 million per quarter [25][19] - The recent tax bill includes provisions that will benefit the company's operations, although quantifying the exact impact remains pending [9][75] Q&A Session Summary Question: What will Boyd do with the proceeds from the FanDuel transaction? - Management clarified that proceeds will be used to reduce leverage and increase quarterly buybacks, while also exploring future growth opportunities [29][30] Question: What is the optimal leverage level for Boyd? - Management indicated that they previously aimed for around 2.5 times leverage but expect to operate below that level for the time being [36][39] Question: What is the current promotional environment in key markets? - Management noted that the promotional environment has been stable, with no significant increases in promotional activities [42][43] Question: Can you provide insights on the pickup in retail play? - Management observed a pickup in unrated play, attributing it to customers staying closer to home, but indicated the need for further observation to determine sustainability [50][51] Question: How will the company approach online gaming strategy post-FanDuel? - Management confirmed no change in strategy, maintaining a focus on regional online gaming rather than pursuing a national presence [55][56] Question: What are the implications of the recent tax changes? - Management acknowledged potential benefits from the new tax provisions but refrained from quantifying the impact until further analysis is completed [60][75]

Financial Data and Key Metrics Changes - For Q2 2025, revenues excluding tax pass-through amounts grew by 4%, while EBITDAR also increased by 4% to $358 million, marking the strongest year-over-year growth in over three years [5][21] - Property level margins exceeded 40%, a level consistently achieved since 2021 [5][21] - Total leverage at the end of Q2 was approximately 2.8 times, expected to reduce to below 2 times post-FanDuel transaction [20][21] Business Line Data and Key Metrics Changes - The Las Vegas Local segment reported its first year-over-year revenue and EBITDAR growth in over two years, maintaining segment margins of nearly 50% [6][9] - The Downtown Las Vegas segment showed stable performance, with revenue and EBITDAR up more than 1% year-to-date [9] - The Midwest and South segment achieved revenue and EBITDAR gains of over 3%, marking its highest quarterly performance in nearly three years [10] - The online segment saw revenue and EBITDA increases driven by Boyd Interactive and modest growth from market access agreements [11] Market Data and Key Metrics Changes - Southern Nevada's employment and local income are on the rise, with average weekly wages up more than 5% year-over-year, contributing to a positive economic outlook [7] - The Las Vegas Valley has nearly $11 billion in construction activity underway, indicating strength in the local economy [7] Company Strategy and Development Direction - The company plans to use proceeds from the FanDuel transaction to pay down debt, invest in properties, pursue growth opportunities, and return capital to shareholders [5][18] - Capital investment programs include ongoing renovations and new developments, with a focus on enhancing long-term growth profiles [12][15] - The company remains committed to a balanced approach to capital allocation, including investments in business growth and shareholder returns [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Southern Nevada economy and the local business prospects, citing positive economic indicators [7][9] - The company noted that the promotional environment has remained stable, with no heightened promotional activities observed [42][43] - Management indicated that while there is flexibility for capital deployment, disciplined capital allocation will continue to guide decision-making [33][39] Other Important Information - The company repurchased $105 million in stock during Q2 and plans to increase its share repurchase program to $150 million per quarter [17][24] - The recent tax bill includes provisions that will benefit the company's operations, such as tax deductions for tips and overtime [8][60] Q&A Session Summary Question: What will Boyd do with the proceeds from the FanDuel transaction? - Management clarified that proceeds will be used to reduce leverage and invest in future growth opportunities, maintaining a balanced capital allocation strategy [28][33] Question: What is the optimal leverage level for Boyd? - Management indicated that while leverage was previously targeted around 2.5 times, the company may operate below that level for the time being as it evaluates capital allocation [36][39] Question: What is the current promotional environment in key markets? - Management stated that the promotional environment has been stable, with no significant changes in promotional activities across their properties [42][43] Question: Can you provide insights on the pickup in retail play? - Management noted a recent improvement in unrated play, attributing it to local customers staying closer to home, but indicated the need for further observation to determine sustainability [50][52] Question: How will the company approach online gaming strategy post-FanDuel? - Management confirmed that there will be no change in strategy, focusing on a regional online casino approach while enhancing their core product [55][66]

Financial Performance - Boyd Gaming reported second-quarter 2025 revenues of $1.0 billion, a 6.7% increase from $967.5 million in the second quarter of 2024[2]. - Net income for the second quarter of 2025 was $150.4 million, or $1.84 per share, compared to $139.8 million, or $1.47 per share, for the same period in 2024, reflecting an increase of 7.5% in net income[2][3]. - Total Adjusted EBITDAR for the second quarter of 2025 was $357.9 million, up from $344.2 million in the second quarter of 2024, marking a 4.3% increase[3]. - Boyd Gaming's operating income for the second quarter of 2025 was $242.4 million, compared to $227.1 million in the same period of 2024, reflecting a 6.7% increase[14]. - Total revenues for Q2 2025 reached $1,033,998, an increase of 6.8% compared to $967,512 in Q2 2024[15]. - Adjusted EBITDA for Q2 2025 was $329,420, up from $316,339 in Q2 2024, reflecting a growth of 4.4%[15]. - Net income attributable to Boyd Gaming for the first half of 2025 was $262,877, compared to $276,318 in the same period of 2024, showing a decrease of 4.9%[18]. - Adjusted earnings per share for Q2 2025 were $1.87, compared to $1.58 in Q2 2024, representing a growth of 18.4%[18]. Segment Performance - The Las Vegas Locals segment achieved its strongest quarterly growth in over two years, with segment margins nearing 50%[5]. - The Online segment experienced growth driven by the company's online casino gaming business, with revenues of $173.1 million, up from $129.9 million in the prior year, representing a 33.2% increase[14]. - The Las Vegas Locals segment generated revenues of $229,091 in Q2 2025, a slight increase from $225,054 in Q2 2024[15]. - The Midwest & South segment reported revenues of $540,077 in Q2 2025, up from $521,750 in Q2 2024, marking a growth of 3.2%[15]. - Adjusted EBITDAR for the Online segment was $22,244 in Q2 2025, compared to $17,057 in Q2 2024, indicating a growth of 30.5%[15]. Shareholder Actions - Boyd Gaming repurchased $105 million in shares during the second quarter of 2025 and has approximately $707 million remaining under its share repurchase authorization as of June 30, 2025[7][8]. - The company paid a quarterly cash dividend of $0.18 per share on July 15, 2025[7]. Financial Position - As of June 30, 2025, Boyd Gaming had cash on hand of $320.1 million and total debt of $3.6 billion[9]. - The company plans to strengthen its financial position by selling its equity stake in FanDuel, allowing for continued investment in properties and growth opportunities[2]. Corporate Expenses - Corporate expenses for Q2 2025 were reported at $35,365, an increase from $31,255 in Q2 2024[18]. Operational Overview - Boyd Gaming operates 28 gaming properties across 10 states, with a focus on enhancing customer experience and service quality[24].