Dividend Watch: Making The Casinos Pay You (WYNN, ASCA, LVS, MGM, MPEL)

Casinos are not generally thought of for having the world’s highest dividend payouts.  That may be slowly changing, particularly now that it seems that Las Vegas is fully mature and has more than enough capacity to carry it for a decade.  This week came news that Wynn Resorts Ltd. (NASDAQ: WYNN) was doubling its dividend, and we cannot help but wonder if other casinos will get on board as well.  These operations make so much money off the public that it seems paying a dividend to holders is the least they could do.

Wynn shares hit a new multi-year high on Wednesday after its solid earnings and after doubling its dividend.  The payout went to $0.50 from $0.25.  Estimates for 2011 are $3.24 EPS from Thomson Reuters.  If that higher payout can be sustained, something which may be economically sensitive, that comes to $2.00 per year or about 1.3% in dividend yields.

The higher dividend appears to be supported by its growth in Macau and a normalization of the Las Vegas operations.  The yield of 0.65% today and the new yield of about 1.3% ahead is above most casino operations.  In the $1 billion casino-class of hotel-casino adult theme park stocks, only Ameristar Casinos Inc. (NASDAQ: ASCA) has a higher dividend yield.  Its $0.105 payout per quarter generates close to a 2.2% dividend yield.

Las Vegas Sands Corp. (NYSE: LVS) has not paid a dividend and it would seem like a real payout might be a ways off from today when you consider that it nearly imploded during the recession.  Sheldon Adelson may want to continue to bolster the books before deciding to go with anything close to what Wynn or Ameristar pays to holders.

MGM Resorts International (NYSE: MGM) has not had any real payouts and it too was close to being deemed “at-risk” during the peak selling in early 2009 during the recession.

Melco Crown Entertainment Ltd. (NASDAQ: MPEL) is probably the least likely of all for some time to have a consistently high payout.  Its operations are still too new and 2011 is the first real year of earnings expected.

Getting excited about a 1.3% dividend yield from Wynn probably doesn’t sound like too much. This is still the highest payout of its class and most competitors do not pay out anything to their holders.

JON C. OGG