Boyd Gaming's (NYSE: BYD) stock increased in Thursday's after-hours trading following the regional casino operator's announcement of a $500 million expansion to an earlier disclosed share buyback program.
Boyd also announced a quarterly dividend of 17 cents per share, consistent with the operator's earlier announcement this year. In May, the gaming firm located in Las Vegas revealed a $500 million share repurchase initiative, which has been supplemented by today's announcement.
"Considering the additional authorization, the Company had approximately $843 million remaining in repurchase authority as of September 30, 2024,” according to a statement.
With a market capitalization of $6.6 billion at the end of US trading today, Boyd could greatly reduce its outstanding shares if it goes ahead with buying back $843 million of its stock. Nonetheless, firms are not legally required to repurchase all shares in a declared buyback plan.
Repurchases Enhancing Boyd Shares
Boyd’s earlier buyback announcement was strategically timed, coming shortly after the stock fell following a lackluster first-quarter earnings report.
The gaming firm announced that update on May 13, when the stock finished at $54.58. It wrapped up at $74.83 today, close to a 52-week peak, showing that Boyd not only achieved advantageous pricing in its buybacks, but those initiatives also led to a significant recovery in the stock over the last six months.
Boyd’s decision to carry out buybacks during periods of low share price is significant, as firms in various sectors frequently face criticism for ineffectively timing repurchases, purchasing their stock when prices are high while neglecting to buy back shares during price declines.
Today's buyback announcement marks Boyd's fourth since June 2022, with each being valued at $500 million. These initiatives complement the operator's quarterly dividend, which was reinstated in February 2022 and has been increased twice since then.
Boyd Repurchases Assisting in Alternative Ways
The pair of repurchase announcements for 2024 by the Orleans operator also has the advantage of readily absorbing the significant amount of stock sold earlier this year by insiders.
During the initial quarter, insiders at the gaming firm sold a large quantity of shares. In a period of under three weeks from February 20 to early March, Boyd insiders, such as Chairman Emeritus Bill Boyd — the son of the company’s founder Sam Boyd — and CEO Keith Smith offloaded around $53.4 million in stock.
Boyd operates 10 gaming establishments in its primary market, which comprise Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Main Street Station, Sam’s Town, Suncoast, and The Orleans. It also manages regional casinos in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania. The firm additionally possesses a 5% stake in the online sports betting giant FanDuel.
