There are only a few casinos that pay dividends. Some of these include Wynn Resorts, Las Vegas Sands, MGM Resorts International, Boyd Gaming Corporation, and several others. Monarch Casino & Resort is joining these casino companies by paying dividends starting this year.
The casino announced this news on Tuesday, February 7, 2023. The company said that it will pay a one-time cash dividend of $5 per share. Then, it will jump to paying 30 cents per share every three months.
The Reno-based operator will pay the one-time cash dividend of $5 per share on March 15, 2023, to stockholders on record by March 1, 2023. The company released a statement detailing how it will pay out other dividends.
The Board of Directors approved an annual dividend payment of $1.20 per outstanding share of Common Stock. This will be payable every 15th day of the third month of every calendar quarter.
Apart from that, the company will review the dividend policy every three months. For now, investors at Monarch Casino can expect a dividend of $5.90 per share.
Monarch Manifested Paying Dividends Last Year
In October last year, Monarch announced it was renovating the second hotel tower at Atlantis Casino Resort Spa Reno this year. Alongside this announcement, the company said that it was considering starting to pay its investors dividends. This announcement came just when the casino had record-breaking third-quarter earnings in 2022.
Monarch went public in 1993. Yet, it has never paid a single dividend since then. By starting to pay dividends this year, Monarch hopes to attract new investors driven by the fact that it is a small-cap stock.
A small-cap stock is more volatile than larger stock. However, dividends equalize the volatility despite market capitalization.
Monarch is one of the few casino companies that will be paying dividends. In fact, most companies stopped paying dividends when the Coronavirus hit the globe in 2019. Instead, these companies paid shareholders on a buyback basis.
Only Red Rock Resorts and Boyd Gaming were motivated to grow dividends. Most other companies such as Caesars Entertainment did not pay dividends. Meanwhile, MGM Resorts International paid tokens.
By starting to pay dividends Monarch looks like it is determined to increase its balance sheet numbers. Monarch CEO John Farahi released a statement highlighting that the Board of Directors' decision to pay dividends was evidence that the company`s two leading properties ensured good cash flow.
The company owns two casino hotels. One is in Black Hawk Colorado and another in Atlantic City.
Possibility of Mergers and Acquisitions
Monarch recently renovated the 27th floor of the Concierge Tower at Atlantis. This refurbishment was designed to help the casino attract wealthier clients. This renovation is also expected to further the revenue generation of the casino in Nevada.
Considering that the casino has completed paying its debts, it can now participate in acquisitions and mergers. Farahi confirmed that the completion of the Colorado-based Monarch casino helped clear its remaining debt.
Farahi also added that the casino`s free cash flow expansion and sturdy balance sheet gave the company the opportunity to return capital to investors. He also said that the company was able to continue investing in its properties as well as consider merger and acquisition openings.