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2013 is panning out to be a great year for investors in
International Game Technology (
IGT). Shares of the mid-cap slot machine maker have climbed more than 34% since the calendar flipped over to January. Now a boost to IGT's 10-cent dividend payout spells even more upside for the second half of the year.
IGT is the biggest manufacturer of casino gaming equipment in the world. Calling them "slot machines" is a little bit of a sleight -- the firm's digitally-powered machines are designed to provide gamers with a much more immersive experience than the old mechanical spinning wheels ever could. And the technology and branding in IGT's games translates into an economic moat for investors. It's a deep moat too: IGT currently controls around 20% of the gaming equipment market.
The debate over online gambling presents a big potential tailwind for IGT, as it opens a big market for the firm's social gaming business. Even as-is, though, IGT's numbers are attractive: this sin stock earns net margins deep in the double digits, it carries a manageable debt load, and it sports a perfunctory earnings multiple. With an impressive track record of boosting dividend payout each quarter, expect to see this stock's 2% yield get hiked sooner rather than later.
To see all of this week's Rocket Stocks in action, check out
the Rocket Stocks portfolio at Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.