It's a commonly held belief that people like to gamble more in tough times as they try to lift themselves out of an unhappy situation.
That could be true, in which case this could make leisure and entertainment (or gambling) stocks some of the best to own in a recession. The following three stocks could be worth a punt at the current prices:
Crown Resorts Ltd (ASX: CWN)
Crown is Australia's largest entertainment and gambling company with a market capitalisation of $9.14 billion.
It has large casinos in Melbourne and Perth, with another planned for Sydney. It could be one of the best stocks to own over the coming years to take advantage of the growth of tourists who want to gamble and stay in the best hotels.
Crown is currently trading at 23x FY17's estimated earnings with a pledged 60c annual partially franked dividend which equates to a yield of 4.78%.
Star Entertainment Group Ltd (ASX: SGR)
This is the owner of The Star casino in Sydney, it has a market capitalisation of $4.58 billion.
This business will also be a beneficiary of the growing number of tourists that are arriving into Australia every year. Sydney Airport Holdings Ltd (ASX: SYD) reports the growing number of international visitors every month and The Star could benefit nicely from the rising passenger numbers once they arrive into Sydney.
Star Entertainment Group is currently trading at 19x FY17's estimated earnings with a grossed-up dividend yield of 3.86%.
Tatts Group Ltd (ASX: TTS)
Tatts is a betting provider and operates a number of lotteries. It currently has a market capitalisation of $6.56 billion.
Management are finding it tough to increase revenue. In its latest report to 31 December 2016 it disclosed that total revenue and other income decreased by 6.9%, which was a big cause in the net profit after tax decreasing by 16.5%.
Tatts is currently trading at 27x FY17's estimated earnings with a grossed-up dividend yield of 5.59%.
Foolish takeaway
I think Crown and Star Entertainment could beat the odds and outperform the market over the next few years. Out of the three, Crown could be the best stock to own with the number of growth projects that it has planned for the next decade.
