Casino-resort operator Las Vegas Sands Corp. (LVS) recently authorized a multi-year share repurchase program worth $2 billion, thereby deciding to return wealth to its shareholders from time to time, depending on market conditions. Mounting cash flows and a solid balance sheet allowed the company to commence a share buyback program.
At the end of first-quarter 2013, its unrestricted cash balances stood at $2.38 billion down slight from $2.51 billion at the end of fourth quarter of 2012 while total debt outstanding was $9.83 billion, which was also down sequentially from $10.23 billion.
The share buyback program helps the company reduce outstanding share count, thereby increasing earnings per share and return on equity. Apart from bolstering shareholder value, this strategic move will also lift the relatively undervalued share price.
Las Vegas Sands also has a dividend distribution program in place, which this Zacks Rank #2 (Buy) company commenced in early-2012 with a recurring dividend of $1.00 per share per year. After one year, the company raised the recurring dividend by 40% to $1.40 per share.
In addition, the company paid a special dividend of $2.75 per share in Dec 2012. Overall, Las Vegas Sands was able to return nearly $3.1 billion of capital to shareholders in 2012.
We appreciate Las Vegas Sands’ efforts to enhance long-term shareholder value. Initiation of dividend distribution and share buybacks, of late, reflect the company’s confidence in its fundamentals.
Some other stocks in the gaming sector worth a look are Churchill Downs Inc. (CHDN), Monarch Casino & Resort Inc. (MCRI) and Multimedia Games Inc. (MGAM), all of which carry a Zacks Rank #1 (Strong Buy).
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