Golden Leisure Contemplating Extra Shareholder Rewards


Posted on: November 4, 2021, 09:23h. 

Final up to date on: November 4, 2021, 09:23h.

Golden Leisure (NASDAQ:GDEN) reported third-quarter earnings yesterday, handily topping Wall Road estimates, and the corporate floated the thought of accelerating shareholder rewards, probably together with a dividend.

Golden Entertainment
Strat proprietor Golden Leisure crushed Q3 earnings. A particular dividend could possibly be on the desk. (Picture: Splash Magazines)

The Strat proprietor reported earnings per share of 91 cents on gross sales of $282.42 million. Analysts anticipated earnings of 75 cents on income of $259.18 million.

Given our vital obtainable liquidity and present valuation, we view utilizing our present $50 million share buyback authorization as a gorgeous means to start returning capital to shareholders,” stated Golden Chairman and CEO Blake Sartini in a press release. “Along with utilizing our buyback availability, we may also proceed to judge potential dividends and different alternatives to create shareholder worth sooner or later.”

Las Vegas-based Golden operates 10 casinos, 9 of that are in Southern Nevada, together with the Strat. The gaming firm is presently within the midst of a $50 million share buyback program and it doesn’t pay dividend.

Gaming Trade Nonetheless Mild on Shareholder Rewards

Previous to the onset of the coronavirus pandemic in 2020, the gaming trade was a reputable dividend vacation spot, however that modified when operators slashed or suspended payouts to preserve money amid a multi-month shutdown of home casinos.

In the present day, MGM Resorts Worldwide (NYSE:MGM) is the one dividend payer among the many main on line casino operators and the corporate pays a paltry one-cent a share per yr. Nevertheless, gaming companies are on higher monetary footing this yr than they have been earlier than the pandemic and a few, together with Golden and MGM, are shopping for again their shares, prompting speak amongst analysts that resumed and new dividends are coming within the house.

For its half, Golden paid $50 million of debt within the September quarter and there no excellent obligations below its $240 million revolving credit score facility. On the finish of the third quarter, Golden had $1 billion in debt and $219.3 million in money and money equivalents, in keeping with the corporate.

Analysts Bullish on Golden Leisure

Throughout quite a lot of industries, some corporations are choosing particular dividends — one-time rewards for traders that forestall companies from having to fulfill ongoing payout obligations. One analyst says it’s potential Golden goes that route.

In a observe to purchasers at the moment, B. Riley analyst David Bain reiterated a “purchase” score on the gaming inventory whereas lifting his worth goal to $75, implying upside of about 40 % from the Nov. 3 shut.

“Our worth goal is predicated on a 16 % low cost to see buying and selling averages, seemingly punitive given GDEN’s distinctive portfolio which we consider carries acute correlation with present and long-term secular development drivers relative to friends,” stated Bain. “We consider administration acknowledges the worth disconnect and is prone to repurchase shares within the relative near-term with an eye fixed on a possible particular dividend in 1H22.”

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