0.37% Dividend Yield, 15 Years of Dividend Hikes – The Gaming and Racing Giant with a Crown Jewel
Where sports, entertainment, and tradition collide
Picture a venue where history and high-stakes betting meet, generating millions from racetracks, gaming machines, and major sporting events. This company turns spectacle into steady revenue, blending old-school tradition with cutting-edge betting platforms and gaming technology. Its core strength lies in turning a beloved American event into a global brand and a diverse business empire.
Churchill Downs (CHDN)
Financial Score: 86 / 99
Quick Tip
To keep your portfolio strong, stay on top of the financials for each company you hold. Solid companies mean better returns, so be sure to check in on their quarterly and annual numbers.Interesting stocks usually score 80+ on the Financial Scale, with top players hitting 90+. If that score dips below 80, it might be a good time to consider cutting ties before things take a turn. Churchill Downs is best known for hosting the Kentucky Derby, the most famous horse race in the U.S., but it has grown into a diversified gaming and entertainment conglomerate. Its portfolio includes racetracks, casino operations, Historical Racing Machines (HRMs), and digital wagering through TwinSpires. In Q3 2025, the company posted record revenue of $683 million, up 8.7% year-over-year, with adjusted EPS of $1.09. The Derby alone generated record-breaking handle, while HRM and gaming segments contributed strong growth. Capital investments in new gaming venues and digital platforms are accelerating, with a $250–290 million spend planned for 2025.
Dividend foundation and resilient growth
The forward annual dividend is $0.44 per share, yielding 0.37%, with a low payout ratio near 7.82%. For 15 consecutive years, Churchill Downs has increased dividends, growing payouts by 41% over the past five years. The conservative payout is driven by a mix of stable racing income, gaming growth, and strong free cash flow. The company returned $455 million in free cash flow in the first half of 2025, underscoring its ability to fund both shareholder returns and expansion.
Q3 2025 operational highlights
Q3 2025 revenue hit $683 million, up 8.7% YoY, with adjusted EPS of $1.09. The Kentucky Derby set new records for attendance and wagering, and HRM revenue reached $265.5 million. The company is expanding its gaming footprint with new HRM facilities in Virginia, Louisiana, and Kentucky, and investing in technology to enhance customer engagement and digital wagering. Capital spending is projected at $250–290 million in 2025, with free cash flow at $455 million for the first half.
Growth powered by expansion and innovation
Churchill Downs is growing through new HRM venues, digital wagering expansion, and strategic investments in entertainment venues. The Richmond HRM venue expansion is on schedule, with a new gaming floor opened in May and the Rose Shire Gaming Parlor in Henrico County expected to open in October. The company expects cash tax savings of $50–60 million from a new federal bill, and its bank covenant net leverage is projected to decline below 4.0x by 2026. Digital platform upgrades are driving new customer acquisition and engagement.
Fun Fact – A Derby tradition and record-setting jockey
The first Kentucky Derby was held at Churchill Downs in 1875, and the track has hosted the Breeders’ Cup nine times. On June 5, 1907, African-American jockey James Lee set an unbroken record by winning all six races on the card at Churchill Downs. The Derby’s attendance typically tops 50,000, but on race day, it can exceed 150,000.
Final Take
Churchill Downs blends a low-yield, long-growing dividend with robust growth in gaming, HRMs, and digital wagering. Its Financial Score of 86 from BeatMarket reflects solid fundamentals and effective risk management, but not bulletproof status. The company’s strengths are its iconic Derby brand, exclusive gaming licenses, and operational expertise in HRMs. However, risks remain from regulatory changes, horse racing’s public image, and competition in digital gaming. Churchill Downs’ expansion into new markets and investment in technology position it for continued growth, but ongoing capital spending and regulatory vigilance are required.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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