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Monarch Casino & Resort, Inc. (NASDAQ:MCRI) Capital Efficiency Analysis

  • Monarch Casino & Resort, Inc. (NASDAQ:MCRI) showcases strong capital efficiency with a Return on Invested Capital (ROIC) of 13.89% which significantly exceeds its Weighted Average Cost of Capital (WACC) of 10.69%.
  • Competitors like Century Casinos, Inc. (CNTY) and Full House Resorts, Inc. (FLL) display lower ROIC to WACC ratios, indicating less efficient capital utilization.
  • Churchill Downs Incorporated (CHDN) emerges as the most efficient among peers with a ROIC of 11.03% and a WACC of 6.32%, but Monarch remains a strong performer in generating value for investors.

Monarch Casino & Resort, Inc. (NASDAQ:MCRI) is a prominent player in the gaming and hospitality industry, operating luxury casino resorts. The company is known for its high-quality service and facilities, attracting a diverse clientele. Monarch competes with other casino and entertainment companies like Century Casinos, Churchill Downs, and Golden Entertainment, each vying for market share in a competitive landscape.

Monarch's Return on Invested Capital (ROIC) is 13.89%, which is notably higher than its Weighted Average Cost of Capital (WACC) of 10.69%. This indicates that Monarch is effectively using its capital to generate returns that exceed its cost of capital. A ROIC to WACC ratio of 1.30 further underscores Monarch's ability to create value for its investors.

In comparison, Century Casinos, Inc. (CNTY) has a ROIC of 0.50% and a WACC of 9.43%, resulting in a ROIC to WACC ratio of 0.05. This suggests that Century Casinos is not generating sufficient returns to cover its cost of capital, which could be a concern for investors. Similarly, Mercantile Bank Corporation (MBWM) and Full House Resorts, Inc. (FLL) also show ROIC to WACC ratios below 1, indicating inefficiencies in capital utilization.

Churchill Downs Incorporated (CHDN) stands out with a ROIC of 11.03% and a WACC of 6.32%, leading to a ROIC to WACC ratio of 1.75. This highlights Churchill Downs as the most efficient in capital utilization among its peers, generating returns significantly above its cost of capital. Golden Entertainment, Inc. (GDEN) also performs better than some peers with a ROIC to WACC ratio of 0.66, though it still falls short of Monarch's performance.

Overall, Monarch Casino & Resort, Inc. demonstrates strong capital efficiency, with its ROIC exceeding its WACC. While Churchill Downs leads in capital utilization efficiency, Monarch remains a solid performer in the industry, effectively generating value for its investors.