Boyd Gaming CorporationBYD

Morningstar Rating

Stock Research and Analysis

by Michelle Chang, CFA

Boyd Gaming has frozen construction on its highly ambitious megaproperty in Las Vegas while it works through the current economic downturn--a prudent move, in our opinion. We think the company's diverse mix of properties should enable it to navigate Read more

Bulls Say

Boyd is well-diversified geographically, with 15 properties in five states. This provides protection against a slowdown in any one market.

The company owns a 50% stake in the Borgata, which opened in 2003 and was the first new casino in Atlantic City in a decade. The casino is flourishing: It grabbed top share in short order and has widened its lead in recent years.

Boyd's $125 million cost-cutting plan appears to have mitigated the deleveraging impact of lower sales on its fixed cost base. Read more

Bears Say

Several new casinos are slated to open in Boyd's markets, which could sap the firm's share. Also, the increased focus on Pennsylvania as a gaming destination could hurt the Atlantic City market (Borgata).

About 40% of Boyd's profits have come from its central region properties. Gaming regulations in these markets can shift dramatically.

Echelon and a bid for Station Casinos heighten Boyd's balance-sheet risk, which was already fairly high. Read more

Strategy

Boyd expanded into four Midwestern states in the 1990s and formed the Borgata joint venture in Atlantic City to diversify itself geographically. With the purchase of Coast Casinos and an interest in Read more

Management

Boyd is a family-run company: Chairman William S. Boyd cofounded the firm with his father in 1973, and his son and daughter are both in senior management. Combined, the three beneficially own about 36% of the company. Boyd's management team is filled Read more

Profile

Boyd Gaming wholly owns and operates 15 casino properties in five states. Nine properties are in the greater Las Vegas area; three are in Louisiana; and Mississippi, Illinois, Read more

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