Casino Stocks & Shares: Dividends or no dividends?
One of the things that we are mulling over at the moment, is whether to invest in casino stocks and shares. If you think about it, it seems a pretty good bet. Casinos are expanding across the world, and they are heavily exposed to Asia which is growing fast. And gambling is firmly fixed in the cultures of most Asian markets. The stock have been volatile, of course- everything has been recently. But as long as you can pick a good entry point and you are in it for the long term, we reckon it’s a good flutter.
And one thing that is really starting to persuade us to get off our backsides and actually buy some shares, is the latest trend on dividends.
The welcome news last year for anyone holding Wyn shares was the announcement of a $5.00 special dividend from Wynn and the widely expected announcement of a dividend in 2012 or 2013 from Las Vegas Sands.
Both companies have reported steadier waters in the U.S. operations and bumper numbers on the Cotai Strip in Macau. Certainly those analysts who were tut tutting the massive capital expenditure on the South Chine Coast seem to have shut up.
And who is going to benefit the most from these dividends? Why, Steve Wynn and Sheldon Adelson of course, which makes me think that this is a trend that is set to continue. Wynn and family own over 20 million Wynn shares – that’s a $100 million cheque to you and me. Crisis, what crisis? Downgrade that champagne to Moet 57 Wynnie Boy! Trade down to the Montecristo cigars Shelly Belly!
There’s a standard $2 dividend a year on Wynn shares anyway, by the way. The latest special dividend makes a total of just under $30 in specials in 5 years – which equates to around a 6% dividend yield plus any money you make on the share price if you get your timing right on entry.
What about other casino shares? Well, International Game Technology pays around 1.5% in dividends , Melco Crown pays nada, and MGM Resorts hasn’t paid one since 2001, so we’d recommend sticking with Wyn for a Win or Sands to make some Rands (sorry, we were struggling there).
So – are we going to go for it and put our money where our mouth is? Yep! It’s not that easy to get into this market for new competition (legal restraints, licenses, capital costs etc). We don’t see Asia crashing any time soon- quite the reverse. AND, the dividends are rolling in, at Wyn, anyway. Count us in.
