These Gaming Stocks Pay -- Guaranteed
When Las Vegas Sands (NYS: LVS) recently announced fourth-quarter results, the company stated it will begin paying annual dividends of $1.00 per share. The dividend is a result of strong cash flow, liquidity, and a solid financial position. How did the company improve these metrics?
For the fourth quarter, Las Vegas Sands reported record growth in Macao property EBITDA, which increased by 27.2%, as well as an adjusted property EBITDA increase of 39.6% at Marina Bay Sands. Year over year, the company also set new record highs for net revenue of $9.41 billion and adjusted property EBITDA of $3.53 billion.
Sands shareholders will receive $0.25 per share ever quarter, with the first payment on March 30, 2012 (for shareholders of record on March 20). Las Vegas Sands will now join Wynn Resorts (NAS: WYNN) as the only two major casino operators that currently pay dividends. Both companies will have roughly the same yield -- around 1.8%.
In the past, other casino operators have paid shareholders, but no longer do. MGM Resorts (NYS: MGM) has paid a dividend twice, once in February of 2000 for $0.025, and again the same time the following year for $0.05 per share. Boyd Gaming (NYS: BYD) also paid a dividend on a quarterly basis from 2003 till mid-2008, when it canceled it. Similar to Boyd in size and domestic concentration, Penn National has never paid a dividend. Foreign heavyweight Melco Crown (NAS: MPEL) has also never given back to shareholders, despite returning 62% over the last 12 months.
Wynn, Las Vegas Sands, and Melco Crown all boast debt-to cash-ratios of 3-to-1 or lower, which may spark Melco to follow Sands' lead in respects to paying a dividend. Looking at this metric for MGM, Boyd, and Penn national -- which have 6.8-1, 18-1, and 9.8-1 ratios, respectively -- it is easy to see they need to concentrate on lowering debt before giving back to shareholders.
In my opinion Las Vegas Sands is now a grade-A stock: It has solid and very reliable growth, great management, and now a dividend. Although Sands didn't make the list of 11 rock-solid dividend-paying companies in the past, maybe now it will. Check out who did make the list by clicking here.
At the time this article was published At the time this article was written, Fool contributor Matt Thalman owned shares of MGM resorts, but no other companies mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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