Boyd Gaming adds $500 million to stock buyback plan
Posted: June 1, 2022, 7:25 a.m.
Last update: June 1, 2022, 7:25 a.m.
Boyd Gaming Inc (NYSE:BYD) joins the gaming industry‘s stock buyback bonanza, today revealing a $500 million buyback program.
Potentially making this announcement all the more significant for investors is that this is not a new buyback program. Rather, the $500 million of its stock that the Las Vegas-based casino operator may buy back is an addition to a previously announced buyout plan that was valued at $361 million.
Boyd adding to this takeover initiative could be interpreted as a sign that he has exhausted the initial part of the plan – something companies are not required to do when announcing takeover efforts.
This additional share buyback authorization reinforces our commitment to pursuing a balanced and robust capital return program. We intend to maintain buyout activity of approximately $100 million per quarter, augmented from time to time by opportunistic buyouts,” Boyd CEO Keith Smith said in a statement.
Boyd operates 28 gambling halls in 10 states, including 11 in his hometown.
Boyd at the forefront of gaming shareholder rewards
Today’s news marks the second time in six months that the Orleans operator has made a takeover announcement, but that’s the end of the company’s shareholder rewards story.
In February, not only reinstated its quarterly dividend following a suspension in 2020 caused by the coronavirus pandemic, but it increased that payment to 15 cents per share, or 60 cents per year. Boyd is one of the few game companies that pays dividends these days. Conversely, operators on the Las Vegas Strip pay no or barely noticeable dividends.
Boyd has the resources to support shareholder rewards, as he concluded 2021 with $344.6 million in cash. Additionally, Wall Street analysts consider the Aliante operator one of the best free cash flow ideas in the industry, indicating that shareholder rewards could be a recurring theme for the company.
Buyouts are all the rage in the gaming industry
While growth and reintegrations are, at this stage, sporadic in the gaming industry, casino operators and equipment suppliers are showing their commitment to buyout plans.
“More gaming stocks have announced buyout plans in the past nine months than in any comparable period in over 10 years,” Roth Capital analyst Edward Engel said in a note to clients last month. “Among US-listed companies, 12 gaming operators/providers have authorized buyout plans since August 2021, including a flurry of announcements this month.”
Everi Holdings (NYSE:EVRI), International Game Technology (NYSE:IGT), MGM Resorts International (NYSE:MGM) and Penn National Gaming (NASDAQ:PENN) are among the gaming companies that are either undertaking initiatives takeover, recently announced his intention to join this party.
Over the past 10 months, at least a dozen casino operators and gaming providers have announced share buybacks.