New Value Analysis of MGM Growth Properties LLC (NASDAQ:MPG)

A new value analysis of MGM Growth Properties LLC (NASDAQ:MPG), a company listed on the NASDAQ, has been added to our research pages. MGM Growth Properties LLC is a US-based REIT with properties in leisure, entertainment and hospitality.  MGP has the largest REIT portfolio of property assets on the Las Vegas Strip.

MGP is slightly different to the usual analysis offered on this site because the corporate entity MGM Growth Properties LLC is a very new.  MGM Growth Properties LLC has only just provided its first set of annual accounts and so does not have the history we normally look for before doing a value analysis.  You can find the accounts here.

MGP has been created though an IPO that raised $1.05 billion in April 2016.  The proceeds of the IPO plus around $4 billion of debt allowed the new entity to purchase the property assets of MGM Resorts International.  MGM Resorts International still owns 73% of the common stock of MGM Growth Properties LLC.

MGP has two interesting features from a value investing point of view.  The first value statistic is the high yield, which has some risk, but looks sustainable for a number of years as there is no significant debt maturities until 2021.

The other value feature is the low price in comparison with the net asset value of the properties.  The low price to asset value is interesting for its own sake, but it also allows a value investor to assess the current relatively high debt levels.  The property assets are worth several times the debt level, which provides some protection for defensive value investors.

Other value statistics such as price to earnings do not show such a great value situation so each investor will have to use their own judgement whether to include MGP as part of an investment portfolio.  The analysis suggests that income investors with a diversified portfolio can buy MGP for the current income and the possibility that the capital value will eventually be reflected in the price of the common stock.

Purchase the value analysis of MGM Growth Properties LLC

To find out the exactly why a value investor should consider an investment in MGM Growth Properties LLC common stock click ‘Add to basket’. Then follow the instructions to download the analysis.