Is MGM Resorts International (MGM) The Best Stock To Buy In Falling Markets Now?

As the market continues to fluctuate, investors are on the hunt for stocks that can weather the storm and potentially thrive in a falling market. One name that has caught the attention of analysts and investors alike is MGM Resorts International (MGM), a global gaming and entertainment company with a strong track record and a compelling valuation. In this article, we will explore whether MGM Resorts International is indeed the best stock to buy in falling markets now.

MGM's Valuation Metrics
MGM Resorts International is currently trading at a significant discount to its peers and the broader market, with a Price-to-Earnings (P/E) ratio of 10.8x compared to the peer average of 17.6x and the industry average of 14.7x. Additionally, MGM's Enterprise Value/Revenue (EV/Revenue) ratio of 2.3x is lower than the peer average of 7.8x, and its Enterprise Value/EBITDA (EV/EBITDA) ratio of 15.6x is lower than the peer average of 21.6x. These valuation metrics suggest that MGM's stock price is relatively low compared to its earnings, revenue, and EBITDA, indicating potential undervaluation.

MGM's Dividend History and Sustainability
MGM Resorts International has a moderate Dividend Sustainability Score (DSS) of 41.94%, indicating that the company may sustain its dividends, but continuous monitoring is advised for any financial shifts. However, its Dividend Growth Potential Score (DGPS) is only moderate, with a score of 13.51%, suggesting limited growth potential. While MGM's dividend history shows a level of stability and commitment to returning capital to shareholders, its dividend payout has been relatively low compared to some of its peers in the hospitality and gaming sector.

MGM's Risks and Challenges
MGM Resorts International faces several risks and challenges that could impact its stock price in a falling market. These include economic downturns, regulatory risks, geopolitical instability, competition, debt levels, and brand reputation. In a falling market, these risks and challenges could exacerbate MGM's stock price decline, making it crucial for investors to monitor the company's financial performance and dividend payouts.

MGM's Analyst Recommendations and Price Targets
Analysts have a strong buy consensus on MGM Resorts International, with an average price target of $52.27, indicating a potential increase of 58.92% from the current stock price of $32.89. This strong buy consensus suggests that analysts believe MGM is likely to perform very well in the near future and significantly outperform the market.



MGM's Financial Performance and Growth
MGM Resorts International has experienced steady revenue growth over the past five years, with a CAGR of 7.8%. However, its net income has been more volatile, with a CAGR of -21.1% over the same period. Despite this volatility, MGM's forward EPS is expected to grow by 7.9% in 2025, indicating that the company is well-positioned for future growth.

Conclusion
MGM Resorts International's undervalued valuation, strong analyst recommendations, and potential for future growth make it an attractive option for investors looking to buy stocks in a falling market. However, investors should be aware of the risks and challenges facing the company and monitor its financial performance and dividend payouts closely. With a moderate Dividend Sustainability Score and limited growth potential, MGM's dividend history and sustainability may not be as strong as some of its peers, but the company's commitment to maintaining a consistent dividend payout indicates that it is taking steps to ensure the long-term sustainability of its dividend. In summary, MGM Resorts International is a compelling choice for investors seeking undervalued stocks with strong growth potential in a falling market, but careful consideration of the company's risks and challenges is essential.