NEW YORK (TheStreet) -- Shares of MGM Resorts International (MGM) - Get Report are gaining by 5.38% to $23.93 at the start of trading on Thursday morning, after the casino operator announced plans to create a real estate investment trust and 2015 third quarter financial results that topped analysts' expectations.
MGM Growth Properties, as the REIT will be known, will contribute the real estate associated with 10 of the company's premier properties. The REIT will assume approximately $4 billion of debt.
"This transaction provides MGM Resorts' shareholders numerous strategic and financial benefits, including delivering our balance sheet and enhancing long-term shareholder value," MGM CEO Jim Murren said.
The properties being contributed to the REIT include seven large scale Las Vegas resort and entertainment properties and three regional casino properties.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUScharitable trust portfolio, commented on MGM's REIT plans calling it a "Brilliant move by Jim Murren who has figured out how to make things work while Macau slips.. It makes so much sense . I have known Jim for 25 years-when he was an analyst at a terrific Wall Street firm covering this group and this is a very wise maneuver."
Additionally, MGM Resorts reported earnings of 12 cents per share on $2.28 billion in revenue for the most recent quarter. Analysts surveyed by Thomson Reuters had forecast for earnings of 4 cents per share on revenue of $2.3 billion.
Separately, TheStreet Ratings team rates MGM RESORTS INTERNATIONAL as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate MGM RESORTS INTERNATIONAL (MGM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
You can view the full analysis from the report here: MGM