Wynn Resorts (WYNN)
From Cabot Wealth Advisory 3/1/16 Sign up for Cabot Wealth Advisory—it’s free!
Casino company Wynn (WYNN) was down 50% over the past year, but has bounced 34% in the past month. The company has been facing declining revenue at its Macau casino, but the latest quarterly report got investors’ hopes up. Macau betting revenue fell 27%, the smallest year-over-year decline in over two years, and revenue growth in Las Vegas was strong, contributing to adjusted EPS of $1.03, well ahead of the consensus estimate of $0.76. And CEO Steve Wynn has been aggressively adding to his stake in the company, buying over $90 million worth of the company’s stock over the last few months, ahead of the opening of the new Wynn Palace in Macau in June.
Wynn isn’t one of the best dividend paying stocks in our universe—the company slashed its dividend by two-thirds less than a year ago, when lower revenue from Macau started cutting into earnings. Steve Wynn argued that the company didn’t want to “issue dividends on borrowed money,” which is a good policy. But the dividend cut is still a signal to income investors that WYNN’s dividend income isn’t as secure as the payouts of more conservative companies, like high dividend blue chip stocks.
For now, WYNN is relatively early in its turnaround processes, so none its rebound is not a sure thing yet. That raises risk for investors who choose the stocks to invest in today—but it also increases your potential reward.
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|Wynn Resorts (WYNN)
3131 Las Vegas Boulevard South
Las Vegas, Nevada 89109
|Index Membership: N/A
Industry: Resorts & Casinos
Full Time Employees: N/A