Published on: December 5, 2024, 04:43h.
Last updated on: December 5, 2024, 04:43h.
Shares of Boyd Gaming (NYSE: BYD) increased in the after-hours trading following the announcement of adding $500 million to their existing share repurchase program.
Boyd also announced a quarterly dividend of 17 cents per share, consistent with their earlier disclosure for this year. With the latest news, Boyd has extended their $500 million share buyback plan revealed in May.
As of September 30, 2024, the Company had around $843 million remaining in repurchase authority
With a market capitalization of $6.6 billion, Boyd could significantly reduce its outstanding shares by repurchasing $843 million of its stock. However, companies are not mandated to buy back all shares under the announced buyback scheme.
Boyd Stock Boosted by Buybacks
Boyd’s previous buyback announcement came at an opportune time after a decline in stock price post a disappointing first-quarter earnings release.
The company made this announcement on May 13 when the stock closed at $54.58. Today, it closed at $74.83, near a 52-week high, indicating a favorable pricing in repurchases along with a strong rebound in the stock over the last six months.
Boyd’s buyback strategy during a low share price period is noteworthy as companies often face criticism for poorly timed repurchases, buying back shares at high prices and missing out on lower prices
Today’s buyback marks Boyd’s fourth since June 2022, each amounting to $500 million, in addition to the operator’s reinstated quarterly dividend in February 2022 that has been raised twice since then.
Additional Benefits of Boyd Buyback
The 2024 repurchase announcements by Boyd not only bolster the stock but also absorb a significant amount of shares sold by insiders earlier this year.
In the first quarter, insiders at Boyd sold a considerable amount of shares. In a short period from February 20 to early March, Boyd insiders, including Chairman Emeritus Bill Boyd and CEO Keith Smith, offloaded around $53.4 million worth of stock.
Boyd operates 10 gaming venues in its home market along with regional casinos across various states. Additionally, the company holds a 5% ownership in FanDuel, a major player in online sports wagering.