In the bustling world of casino operators, Golden Entertainment has just rolled the dice in a bold new direction, establishing itself as a beacon of confidence in the industry by issuing its inaugural quarterly dividend. The news arrived on a note of celebration; nestled within its fourth-quarter earnings report, the Strat operator released the announcement that it will bestow a quarterly dividend of 25 cents per share upon its investors. As the calendar marks April 4, those holding shares on record as of March 18 will find their persistence rewarded.
Intrigue abounds as the payout, set against the company’s closing share price of $34.26, ushers in a dividend yield of 2.9% as of the first of March. A figure no small-cap investor could easily dismiss, this yield leaps over twice that of the Russell 2000 Index—a small-cap savant matchup, given Golden Entertainment’s approximate $982.23 million market capitalization.
Golden’s ledger certainly echoes the sound of sturdy financial footing. At the close of the previous year, a bountiful reserve of $197.6 million in cash and equivalents graced its books, not to mention proceeds from the sale of a Nevada-based distributed gaming operation, finalized on January 10. Such liquidity serves as fertile ground for shareholder indulgences.
Past gestures toward shareholder goodwill have not gone unnoticed. In the sun-kissed days of last July, Golden unveiled a generous special dividend of $2 per share and fortified its share repurchase program by $100 million. These moves are heralds of the company’s fiscal vitality.
Echoing this sentiment, analysts from the fortress of foresight at Macquarie have cast a favorable gaze upon Golden. Chad Beynon, wielding the quill of analysis, champions the stock as a prudent venture, particularly for those seeking a slice of the thriving Southern Nevada Gaming scene. With an “outperform” rating and eyes set on a $47 price target, Beynon envisions a potential 37.1% ascent from the starter blocks of March 1.
As the year unfolded, the fourth quarter witnessed assertive financial maneuvers by the Arizona Charlie’s operator, with $59 million in debt repurchased, capping off a $239 million debt reduction for the year. With the dust settled at year’s end, $677.7 million in remaining liabilities stood against an untouched $240 million revolver.
Yet, it is the company’s endeavors in Laughlin, Nevada, that both tantalize with potential and brim with mystery. Despite a fourth-quarter dip of 9% in EBITDA across its Laughlin casino duo, one concert short of yesteryear’s tally, revenue nonetheless climbed. Golden has its sights locked on a horizon of margin stabilization and a refreshed entertainment lineup to fuel its Laughlin ventures into 2024.
Golden’s tight-lipped stance on the dormant Colorado Belle, however, dangles a question amidst its otherwise transparent narrative. The once-vibrant riverboat casino, fallen silent in the wake of the pandemic, remains shrouded in uncertainty. Though its doors stay closed, the river’s whispers speak of change, with Golden Entertainment yet to chart the course for this slumbering vessel’s future.
