Based on that measure, roughly defined as total capital invested in a project divided into earnings before interest and taxes, corporate earnings don't look so spectacular.

One gaming analyst who's crunched the numbers says the highest returns on invested capital, or ROICs, will be generated by Station Casinos and Wynn Resorts Ltd. in 2007.

The 81-page report, authored by Bear Stearns analyst Joe Greff, didn't include Las Vegas Sands Corp. in its analysis of major gaming operators.

Greff, whose firm has analyzed returns once a year for the past several years, calls ROIC "the most accurage gauge of a company's ability to create value."

"Looking at ROIC enables an investor to determine how efficiently a management team runs its assets independent of how it chooses to finance those assets," he said.

In other words, ROICs are a good way to determine whether a company is efficient at generating a profit. When measured against the competition, these percentages help investors determine whether particular stocks are worth buying.

Expressed as a percentage return on a company's total capital, actual figures are less telling than trends, Greff said.

"Directional changes are more important than absolute levels," he said. "It helps you understand how well a company has allocated and generated capital to generate incremental profits to shareholders."

Does this mean that Station and Wynn are the best casino stocks to buy now?

Not necessarily. Some companies such as MGM Mirage, which spends more extravagantly on upgrades than its peers, have witnessed stock prices rise even as their ROICs come in below the competition.

"We view MGM as less of a return story and more of a cash flow story," Greff said. "We're looking at cash flows and the quality of their assets."

Several gaming companies will improve returns in 2007 after weathering the Gulf Coast hurricanes and dipping into their pockets to build and expand casinos.

Wynn Resorts is expected to generate the highest ROIC in 2007, at 13.3 percent, up from an estimated 6.9 percent this year. By then, Wynn Las Vegas will be more efficient. More importantly, the company's recently opened Wynn Macau will be benefiting from tremendously strong cash flows expected from that market.

"Our take on Macau is that it's a very strong and deep market with far better returns than what operators can achieve in the United States," Greff said. "Wynn's returns are unique in our coverage universe given that two high-return properties comprise its operations in the near term."

Of course, Wynn returns were boosted by the company's $900 million Macau subconcession sale to PBL/Melco.

Once up and running, Wynn Macau is expected to generate a 30 percent EBIDTA return — well above the mid-teens returns casinos generally expect at home.

Greff expects Station to generate an ROIC of 12.7 percent, up from 11.7 percent this year. While the biggest locals operator has been near the top of its class the last few years, that's still less than what Station generated in 2005.

Greff blames the decline on increased debt from new projects and land acquisitions "which should bear fruit in 2007 and beyond."

While the company opened its expensive Red Rock Resort this year and is wrapping up three casino expansions around town, Greff anticipates bigger returns to come in future years as the company begins to develop several parcels of vacant land for casinos as well as the development of tribal casino deals that require "virtually no upfront capital from Station."

Return trends for Harrah's Entertainment and MGM Mirage aren't too shabby, either.

Harrah's, known for being one of the most prudent spenders on the Strip, reduced returns when it swallowed Caesars Entertainment last year — a deal that makes financial sense in the long term but has ballooned company debt. Harrah's also felt the brunt of the Gulf Coast hurricanes, which destroyed two casinos and damaged two others.

Greff estimates that company's ROIC at 8.1 percent next year, above this year's estimate of 7.1 percent.

Similar to Harrah's, returns at MGM Mirage are expected to improve next year as the company better integrates its acquisition of Mandalay Resort Group and the reopening of Beau Rivage after the Gulf Coast hurricanes boosts earnings. MGM Mirage also is looking at opening multiple casinos in the coming years. These projects — in Las Vegas and Macau — are expected to generate above-average returns. On the other hand, MGM Mirage is known for outspending the competition, dragging down ROICs — estimated at 7.7 percent next year and 7.5 this year — below its peers.

Boyd Gaming Corp.'s ROIC is expected to fall to 9.2 percent in 2007 from 10.9 percent this year as the company shuts down its historic Stardust hotel and begins development of its $4 billion-plus Echelon Place.

You've got to spend money to make money, or so the saying goes.

"By and large, we think ROICs and value spreads should improve in 2007 for most operators as capital investments begin to generate increased earnings," Greff said.