Nevada: More Than Just Gambling?

Nevada is more than Las Vegas. Its banking and finance industries are very strong, as is also the construction industry, but there is yet a lot more. Check out the following interesting facts:

1. Nevada is a state without usury limits, which has attracted many credit card companies to establish in the state.
2. After California, Nevada produces the most geothermal energy in the nation.
3. Nevada produces about 10% of the world’s gold supply.
4. Nevada has no corporate income tax.
5. No franchise tax
6. The state has no personal income tax.
7. There is no state tax.
8. Nevada permits one-individual corporations.
9. There are more than 300,000 companies incorporated in the state of Nevada.
10. The state does not require that the directors of a company be stockholders.

The following companies have market caps of over $1 billion, and are headquartered in Nevada:

• Las Vegas Sands Corp. (LVS) builds resorts worldwide, it is also the owner of the Venetian resort in Las Vegas. The stock has a PEG of 3.43.
• Wynn Resorts Ltd. (WYNN) builds and operates casinos and resorts, such as the Wynn which it owns and operates. The stock has a P/E of 29.7, and a PEG of 1.59.
• MGM Mirage (MGM) posses and administers resorts throughout the country. The stock has a P/E of 8.14, and a PEG of 2.05.
• International Game Technology (IGT) produces and sells gaming equipment in the domestic and international markets. The stock has a P/E of 18.45, a PEG of 1.6, and it pays a yield of 2.40%.
• Sierra Pacific Resources (SRP) generates and delivers energy in the south of the state. The stock has a P/E of 12.07, a PEG of 0.9, and it pays a yield of 2.80%.
• Ormat Technologies (ORA) its main business is the generation of geothermal energy, both nationally and internationally. The stock has a P/E of 43.18, a PEG of 1.99, and it pays a yield of 0.40%.
• Bally Technologies (BYI) produces and delivers gaming systems and other equipment related to the gaming industry around the globe. The stock has a P/E of 21.33, and a PEG of 0.65.
• Southwest Gas Corp. (SWX) purchases, and sells natural gas in Arizona, California and Nevada. The stock has a P/E of 15.22, a PEG of 2.38, and it pays a yield of 3.20%.
• Boyd Gaming Corp (BYD) is a gaming company that operates in the United States. Its stock has a P/E of 24.18, a PEG of 0.98, and it pays a yield of 4.30%.
• Employers Holdings, Inc. (EIG) is an insurance company specialized in commercial properties and casualty insurance. The stock has a P/E of 7.15, a PEG of 0.98, and it pays a yield of 1.40%.

Disclosure: The author does not own any of the above.

Comments

[BxCapricorn:]

We're also going to sport our fair share of bank defaults. Fortunately most of the "investors" that came over from California with their "winnings" from the gameshow that was California real estate, 2002-2006, also originated many of their carefully constructed loans in their home state. Unfortunately for Nevadans, those that speculated with our housing market (and certainly they were not all from California) entered and left the state like Visigoths (think Rome). Now we sit with thousands upon thousands of empty homes, largely uninhabitable, because plumbing, wiring, cabinetry, fixtures and carpets have been pulled out and taken. You really have to see these properties to believe it.

2008 Aug 28 09:15 AM

[jimmy46:]

And property taxes are lowwwwww!

I have a nice 4 bed 3bath home in Reno, probably $300k now,
the annual tax?
Less than $1200, and by law they can't raise it more than
3% a year.

2008 Aug 28 01:43 PM

[User 155569:]

so what is the point of the author? you want to go long NV real estate? that would be incredibly stupid

2008 Aug 28 07:51 PM

[John C. Lee:]

prostitution is a booming industry in NV, right?

2008 Aug 29 04:16 AM

[Richard Col...:]

This is an excellent well written article. This would be an opportunity for someone who wanted to move to Las Vegas to buy good property cheap and rebuild. You know buy low, sell high. I don't think you'll find homes such as BxCapricorn talks about in the better neighborhoods.
Daniel Kowkabany

2008 Aug 29 09:29 AM

[The Market ...:]

How can the author omit PICO Holdings? Through their subs Vidal Water Company and Nevada Land and Resource Company, LLC , they have substantial operations and resources in Nevada. I consider this company THE only alternative to investing in Nevada other than the casino stocks.This is one of my core holdings in my retirement portfolio along with Leucadia National. PICO's symbol is PICO.It has had a pretty good run over the last few months so I am waiting for a correction to add to my position.

2008 Aug 29 11:15 AM

[billddrummer:]

Another industry that's popular in NV is warehousing. There's no inventory tax either, and companies with large distribution needs have leased or purchased millions of square feet of warehouse space in Northern NV along a corridor stretching from Reno to Fernley (approximately 40 miles).

In addition, the largest industrial park in the world is being developed east of Reno. The Reno Tahoe Industrial Center targets companies needing large acreage for warehousing, heavy machinery production, building materials manufacturing and distribution, and more. Wal-mart built a 1 million s.f. grocery distribution center in the business park as the first owner/user.

Read more here:
www.lancegilman.com/ma...

As far as prostitution, it's legal in rural counties, but illegal in Washoe and Clark counties (where 85% of the population resides). Brothels have been hard-hit by fuel prices. A good percentage of their clientele is truck drivers, who are still paying $1000 to fill their trucks. Before, when it only cost $400 to fill up, some drivers would stop to relax.

I love NV. Lived here for nearly 30 years, and don't see myself moving away.

2008 Aug 29 11:22 AM

[billddrummer:]

Followup to my last comment:

One of the reasons NV, and particularly Northern NV, is so popular as a warehousing hub is because it's within one day's drive of major metro areas (SF Bay, Bakersfield, Portland OR, Salt Lake City, UT). Represents nearly 50 million people altogether. Add to that the fact that weather is typically good year round (300+ sunny days/year, little snow/rain) and it's perfect as a distribution center.

The downside to that is that modern warehouses don't need lots of people, so employment growth isn't as robust as we'd like. The recent challenges in the housing market have dealt severe blows to construction employment, which represented nearly 20% of workers at the peak of building here back in mid-2005. That sector is down about 30%, maybe more.

But it's still a nice place to live.

2008 Aug 29 02:39 PM

[Richard Col...:]

correction billddrummer, It's the only place to live.
Daniel Kowkabany

2008 Aug 29 03:24 PM