Boyd Announces $500 Million Stock Repurchase Program
The stock price of Boyd Gaming (NYSE: BYD) picked up momentum early in the week following an announcement from the company about a new $500 million share repurchase program. The Las Vegas-based casino operator revealed that their board of directors approved this new initiative and also stated they would pay out a quarterly dividend of 17 cents per share.
The statement highlighted that with this additional authorization, Boyd Gaming had nearly $721 million remaining for buybacks as of March 31, 2024. Furthermore, the board declared a quarterly cash dividend of $0.17 per share, to be distributed to shareholders on July 15, 2024, as long as they were owners of the shares on June 15, 2024.
Boyd Gaming's shares witnessed a 2% increase in the early trading following this news.
Appropriate Timing for Boyd's Buyback Program
The news of Boyd Gaming's fresh $500 million share repurchase plan coincides with a rough patch for the company's stock, suggesting that management views value in the current share price.
Over the past month, the stock declined by 14.3%, which accounts for an 11.9% drop year to date. This downward trend is primarily driven by a disappointing first-quarter earnings report that didn’t meet analysts’ expectations.
First-quarter 2024 was challenging for Boyd Gaming due to several reasons such as unfavorable weather conditions at its Midwest and Southern venues, and heightened competition in the Las Vegas Locals market. Red Rock Resorts' (NASDAQ: RRR) Durango Casino & Resort, located in Southwest Las Vegas, that was inaugurated in December 2023 has been causing stiff competition for Boyd's Las Vegas casinos. In addition, other local competitors' promotional activities have put pressure on both Boyd and Red Rock.
Boyd operates 10 gaming venues in Nevada, such as Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Main Street Station, Sam's Town, Suncoast, and The Orleans. The company also manages regional casinos across several US states including Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania.
Boyd's Buyback Program Following Insider Share Dumps
An interesting aspect of Boyd Gaming's repurchase scheme is that it was announced soon after insiders at the company sold significant shares. In just a span of three weeks – from February 20 until early March – Boyd insiders, including chairman emeritus Bill Boyd, the son of the company's founder Sam Boyd, and CEO Keith Smith, sold about $53.4 million worth of Boyd's stock.
These transactions took place before the release of the first-quarter financial results, which led to a sharp decline in the stock's value. However, in the first quarter, Boyd made a purchase of $105 million worth of its own shares.
By the close of March 2024, Boyd Gaming had $283.5 million cash on hand and a total debt of $2.9 billion.
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Source: www.casino.org
