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February 12, 2012

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Wynn Resorts to begin paying shareholder dividend

By Steve Green (contact)

Published Monday, Nov. 9, 2009 | 7:42 a.m.

Updated Monday, Nov. 9, 2009 | 10:11 a.m.

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Wynn Resorts Ltd. today announced it will start sharing profits with shareholders in the form of dividends, with the first payout set for Dec. 3.

The Las Vegas company announced a special cash dividend of $4 per share for stockholders of record as of Nov. 19, which will cost it about $489 million based on the approximately 122.2 million shares outstanding.

Thereafter, a regular cash dividend program is also planned. It's anticipated this regular cash dividend will be 20 cents per share for the first quarter of 2010, payable in the second quarter.

Wynn didn't immediately say why it's paying a dividend.

Dividend programs are typically created to boost value in a company's stock and may be an indication the company doesn't need to hold on to cash for development projects.

In this case, Wynn recently dropped out of the bidding to create a casino at New York City's Aqueduct race track and doesn't appear to have any big U.S. development or acquisition projects in the works.

Having completed a $1.87 billion stock offering for a stake in its Macau business, Wynn is looking at expansion in the Chinese gaming region.

Officials at Wynn Resorts couldn't immediately be reached for comment, but Sterne Agee securities analyst David Bain said it appears Wynn decided on the dividend because it hasn't yet found other opportunities for investing its cash that would bring a rate of return that makes sense.

"There is no question this is a financially strong company with resources to give that extra gift to shareholders, but we would prefer to see capital recently raised from Hong Kong to be plowed into a large growth opportunity, such as Cotai, Macau," Bain said in a client note. "The company still has the capabilities after the dividend to build on Cotai, obviously, but clarity on timing (if ever) is weak."

He said Wynn's dropping out of the Aqueduct bidding wasn't a negative, as Aqueduct in the Queens borough of New York didn't fit the profile of Wynn to operate in premier leisure destinations such as Las Vegas and Macau.

Wynn stock rose 6 percent in early trading today on the news, trading at $63.28, up $3.55.

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