Las Vegas Sands Corp (LVS) recently enhanced shareholder value based on its strong cash flow position and in anticipation of a dividend tax rate increase in 2013. The Board of Directors has approved a special dividend of $2.75 per share on top of its regular quarterly dividend of 25 cents.
The special dividend equates to a 6.2% yield at current levels and will be paid on December 18, 2012 to shareholders of record as of December 10, 2012.
The company, in the recently concluded third quarter, had increased its quarterly dividend by 40% to 35 cents per share. This equates to an annual payout of $1.40 per share, effective from the first quarter of 2013.
At the end of the third quarter of 2012, the company had $3.75 billion in unrestricted cash balance. Moreover, with only one major Sands Cotai Central resort project in the pipeline, the capital requirement of the casino company remains limited.
One of Las Vegas Sands’ peers, Wynn Resorts Limited (WYNN) also rewarded its shareholders with a hefty special dividend of $7.50 per share in its recent third quarter. Wynn also doubled its quarterly dividend to $1.00 per share, payable from the first quarter of 2013.
We believe additional dividend along with regular dividend affirms Las Vegas Sands’ positive outlook and reflects its confidence in its fundamentals.
Over the last 7 days, none of the estimates were revised. We believe that the company’s decision to share more profits with shareholders might encourage analysts to pull their estimates upward, which in turn may enhance its Zacks Rank. Las Vegas Sands currently holds a Zacks #3 Rank, translating into a short-term Hold rating.
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