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Las Vegas Sands (NYSE: LVS ) has joined a growing list of companies paying big dividends to shareholders ahead of a likely increase in capital gains taxes next year. The company authorized a $2.26 billion payment to shareholders, which amounts to $2.75 per share.
Of course, the biggest beneficiary is Sheldon Adelson, who will personally pocket $1.2 billion from the payment. Adelson was one of the largest donors to Republican candidates this year, so it's no surprise that he's pulling as much money as possible from the company after President Obama won. But he isn't the only one paying out ahead of tax increases.
Wynn Resorts (Nasdaq: WYNN ) paid a special dividend of $7.50 to shareholders earlier this month. The large dividend has become fairly regular for Wynn, so it wasn't a huge surprise, but Steve Wynn is also worried about our current political leaders, so he was likely looking to get money out of the company.
You shouldn't expect such moves from the likes of MGM Resorts (NYSE: MGM ) and Caesars Entertainment (Nasdaq: CZR ) , though. Neither company has the balance sheet to pull off such a payment, so shareholders will have to be happy with coal in their stockings.
Is now the time to buy?
What is interesting about both announcements is that shares of Wynn and Las Vegas Sands both jumped when special dividend announcements were made. Las Vegas Sands is up $2.41 today, nearly the entire value of the dividend. Wynn's stock jumped $8.14 after its announcement.
The euphoria of this special dividend doesn't usually last long, and Wynn's stock has fallen to near where it was prior to the announcement on an adjusted basis. I wouldn't be surprised to see Las Vegas Sands do the same thing in the short run. Chasing special dividends just isn't a wise investment if you have to pay up for them.
The dividend is a short-term pop, but investors should focus on the long-term fundamentals of Las Vegas Sands.
Taking the long-term view
For many companies, successfully capitalizing on a booming Chinese economy is like winning the jackpot. That's literally the case for gaming company Las Vegas Sands, which made a big bet on Macau gaming about a decade ago that's paid off in spades. The company is now looking to spread it's empire further, but will it be able to replicate its prior successes? Learn about all these opportunities, and the risks they pose, in our brand new premium report on Las Vegas Sands. We're providing a full year of analyst updates to go with it, so make sure to claim your copy today by clicking here.