How to Invest in the Kentucky Derby & Horse Racing

The Kentucky Derby will take place at the end of this week, on Saturday, May 6, in Louisville, Kentucky. This is one of the most watched horse races in the United States. The Kentucky Derby is the initial race of the Triple Crown of Thoroughbred Racing. The second race is the Preakness Stakes and the third is the Belmont Stakes.

If you want to make money from horse races, you can bet on a race horse, or you can invest in a horse race track related stock.

The host of the Kentucky Derby is Churchill Downs (CHDN), the holding company of the Churchill Downs Racetrack founded in 1875. Other operations it has includes Arlington Park, the Calder Race Course, the Fair Grounds Race Course, and the Trackside Off-Track-Betting Facilities. The stock trades at 23 times forward earnings. The company pays a small dividend of 0.78%.

Another racetrack stock is Dover Downs Gaming and Entertainment (DDE), which owns Dover Downs Raceway, a harness racing track with pari-mutuel wagering. The stock sports a very favorable forward price to earnings ratio of 6.3.

Penn National Gaming Inc. (PENN) owns many racetracks and off-track wagering operations in Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Ontario. The stock has a forward PE of 23.4. The yield is a substantial 3.32%.

Hope you place your bet on the right stock, and your investment comes in first place.

Disclosure: Author did not own any of the above at the time the article was written.