Wynn Resorts will pay its shareholders a $4 per share dividend on Dec. 3, which will earn Steve Wynn, the casino operator’s founder and largest shareholder, a payment of at least $88.6 million.
The company’s board of directors authorized the special cash payment for shareholders of record as of Nov. 19.
According to filings with the Securities and Exchange Commission, Wynn, the chairman and chief executive officer, holds more than 22.15 million of the company’s 123.11 million outstanding shares.
The company, which operates Wynn Las Vegas, Encore, Wynn Macau, and is building the $650 million Encore at Wynn Macau, announced it was starting a regular cash dividend program next year. It anticipates paying 20 cents per share dividend in the first quarter.
In total, the one-time $4 payment will cost Wynn Resorts more than $492.44 million.
In December 2006, Wynn paid a $6-per-share dividend to stockholders after the company sold its Macau subconcession for $900 million.
The news, announced before the stock exchanges opened Monday, had a positive impact on the company’s shares, which closed at $63.54 on the Nasdaq National Market, up $3.81 or 6.38 percent.
Analysts said the company is showing strength in its balance sheet. Wynn has roughly $3.1 billion in cash after its initial public offering on the Hong Kong Stock Exchange while the company’s long-term debt of $4.1 billion is relatively manageable compared to others in the casino industry.
The company is funding construction of Encore at Wynn Macau through cash flow.
“We believe Wynn is in an excellent position to not only grow once markets stabilize but also take market share from competitors,” Stifel Nicolaus gaming analyst Steven Wieczynski told investors.
Oppenheimer gaming analyst David Katz said Wynn’s plans for a quarterly dividend program could broaden the company’s investor profile to include dividend-based investors.
“Although gaming stocks are not historically valued based on dividend yield, we believe the special cash dividend, in addition to a regular cash dividend, will serve as key support for the shares’ premium valuation,” Katz wrote in a research note.
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