Boyd Bounces on New $500 Million Buyback Plan

Posted on: May 13, 2024, 09:45h. 

Last updated on: May 13, 2024, 09:54h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of Boyd Gaming (NYSE: BYD) delivered a much-needed bounce early Monday after the regional casino operator announced a new $500 million share repurchase program.

Boyd dividend
Boyd Gaming’s Fremont Hotel and Casino in downtown Las Vegas. The company announced a $500 million share buyback plan on Monday. (Image: Vegas Means Business)

The Las Vegas-based company said its board of directors approved the buyback plan. Boyd also declared a quarterly dividend of 17 cents per share, which was in line with what the operator announced earlier this year.

Considering the additional authorization, the Company had approximately $721 million remaining in repurchase authority as of March 31, 2024,” according to a statement. “Additionally, the Board of Directors has declared a quarterly cash dividend of $0.17 per share, payable July 15, 2024, to shareholders of record as of June 15, 2024.”

Shares of Boyd were higher by 2% in early trading on the news of the new stock repurchase scheme.

Good Timing for Boyd Buyback Announcement

News of the fresh $500 million share repurchase plan arrived as Boyd’s stock has been floundering, potentially indicating management sees value in the downtrodden shares.

Over the past month, the stock is down 14.3% — a slide that has the shares lower by 11.9% year to date. Much of that weakness is attributable to the operator’s disappointing first-quarter earnings report in which it missed Wall Street estimates.

In the first three months of 2024, Boyd was hamstrung on multiple fronts, including bad weather hampering its gaming venues in the Midwest and the South, and “increased competitive pressures in the Las Vegas Locals market.” Red Rock Resorts’ (NASDAQ: RRR) Durango Casino & Resort in Southwest Las Vegas, which opened last December, is the primary source of new competition to Boyd’s Las Vegas properties, but promotional activity by other competitors is pressuring both Boyd and Red Rock.

Boyd runs 10 gaming venues in its home market, including Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Main Street Station, Sam’s Town, Suncoast, and The Orleans. It also operates regional casinos in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania.

Boyd Buyback Announced After Insiders Dumped Shares

An interesting element of the Boyd buyback announcement is that it arrived soon after insiders at the gaming company dumped a significant amount of shares. In a less than three-week stretch spanning February 20 through March early March, Boyd insiders, including Chairman Emeritus Bill Boyd — son of the company’s founder Sam Boyd — and CEO Keith Smith sold approximately $53.4 million worth of the stock.

Those sales came in advance of the aforementioned first-quarter earnings report on which the stock tumbled. Those transactions were offset by the company buying back $105 million worth of its shares in the first quarter.

As of the end of March, Boyd Gaming had cash on hand of $283.5 million, and total debt of $2.9 billion.