Golden Entertainment Joins List of Casino Dividend Payers

Posted on: March 2, 2024, 05:43h. 

Last updated on: March 4, 2024, 12:08h.

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

Golden Entertainment (NASDAQ: GDEN) is now among the group casino operators paying investors a quarterly dividend.

Golden distributed gaming
Golden Entertainment’s corporate logo. The company announced its first quarterly dividend on Thursday. (Image: PR Newswire)

In conjunction with its fourth-quarter earnings report on Thursday, the Strat operator announced that it initiated a quarterly dividend of 25 cents a share. The distribution is payable on April 4 to shareholders of record as of March 18. Based on the gaming company’s closing share price of $34.26 yesterday and a $1 per share annual payout, Golden Entertainment’s dividend yield would be 2.9% as of March 1.

That’s more than double the yield on the Russell 2000 Index, which is a widely followed gauge of small-cap equities — a relevant comparison, because with a market capitalization of $982.23 million, the gaming resides in small-cap territory.

At the end of last year, Golden had cash and cash equivalents of $197.6 million, which doesn’t include cash from the sale of its Nevada distributed gaming unit. That transaction closed on Jan. 10.

Golden Can Support Rewards

Golden Entertainment isn’t a stranger to shareholder rewards. Last July, it announced a special dividend of $2 per share, while adding $100 million to a share repurchase program. Those moves underscore the robust health of the operator’s balance sheet.

With one of the strongest balance sheets in gaming and full ownership of its properties, we continue to recommend GDEN as an inexpensive way for exposure to the healthy and growing Southern Nevada Gaming region,” wrote Macquarie analyst Chad Beynon in a note to clients.

He has an “outperform” rating on Golden, with a $47 price target, which implies upside of 37.1% from the March 1 close.

In the fourth quarter, the Arizona Charlie’s operator repurchased $59 million of debt, bringing its 2023 debt reduction tally to $239 million. At the end of the year, the gaming company had $677.7 million in outstanding liabilities and no outstanding borrowings on its $240 million revolving credit facility.

Laughlin Source of Strength, Intrigue

While earnings before interest, taxes, depreciation, and amortization (EBITDA) at Golden’s two Laughlin, Nevada casino resorts declined 9% in the fourth quarter, revenue rose. That’s despite there being one less concert than in the year-earlier period.

“In December, Laughlin revenue and EBITDA showed positive growth over the prior year, and we continue to see signs of margin stabilization to start 2024. Entertainment is a big driver of performance for our Laughlin properties, and we are working to optimize our offerings to create more cost-effective traffic drivers to our venues over the coming year,” said Golden CFO and President Charles Protell on a conference call with analysts.

However, the operator remains mum on the still-shuttered Colorado Belle — a Laughlin venue that was closed by the coronavirus pandemic and has yet to reopen. It’s unlikely Golden will reopen that riverboat casino. But the company hasn’t yet publicly revealed next steps for the property.