Wynn Palace Cotai
Wynn Palace Cotai (artist's model). Source: Wynn Resorts.

When you ask dividend investors to name their top stocks, most will choose high-yielding powerhouse companies that have a long history of delivering cash to their shareholders. Wynn Resorts (NASDAQ:WYNN) doesn't fit that pedigree well, but in a short period of time the casino giant has nevertheless made its case for why it deserves to be a top dividend stock.

At first glance, Wynn Resorts isn't even an obvious pick for the best dividend stock within the casino industry, as rival Las Vegas Sands (NYSE:LVS) currently has a higher yield. But shareholders in Wynn Resorts have good reasons to believe they'll end up the long-term dividend champions by sticking with CEO Steve Wynn and his management team. Let's look at three ways that Wynn Resorts makes its case for being a top dividend stock.

1. Wynn Resorts has consistently rewarded investors with huge special dividends.
Part of the confusion about Wynn Resorts and its dividend policy stems from the fact that until a few years ago, the company didn't really have an obvious strategy for returning capital to shareholders through these payouts. As you can see from Wynn's history of dividend payments, the casino giant hasn't been very predictable in how much it delivers to its investors.

WYNN Dividend Chart

WYNN Dividend data by YCharts.

The reason for the topsy-turvy look of Wynn's dividend chart is that the company routinely declares special dividends. At one time, these were the only payouts investors could expect in a given year. Because of the way that many popular finance websites set up their quote data, though, these special dividends were not necessarily reflected in Wynn's dividend yield.

But when you include the special dividend amounts, it becomes clear Wynn Resorts has been a yield powerhouse. In 2006 and 2007, the stock paid a $6 per share dividend, amounting to almost 7% of the share price in 2006 and 5% of its price the following year. The company skipped its 2008 payout, but 2009 saw a $4 per share special dividend that corresponded to a 6% payout, and dividends of $8 per share in 2010 and 2012 added between 7 and 8 percentage points to its effective yield.

Special dividends haven't always been that big, with 2011's $5 payout and 2013's $3 per share dividend having a smaller impact. Yet as a supplement to what has become a substantial regular dividend, special dividends increase Wynn's attractiveness to income investors.

Wynn Vegas
Wynn Las Vegas. Source: Wynn Resorts.

2. Wynn Resorts' regular dividend payments are also picking up steam.
Until 2010, Wynn Resorts relied on special dividends as its only method of paying shareholders. But four years ago, the company started paying a modest $0.25 per share quarterly dividend, and although that amounted to barely a 1% yield, it nevertheless got the ball rolling on more consistent dividend growth for Wynn.

Since then, Wynn has boosted its regular dividend every year by a quarter per share, with the amount now having reached $1.25. By itself, that amount produces a yield of nearly 3%, and although a five-year track record of dividends isn't anything extraordinary in a market in which many stocks have made consecutive annual increases for decades, it nevertheless shows that Wynn Resorts is serious about how it returns capital to shareholders.

Wynn Mass
Rendering for possible Massachusetts casino. Source: Wynn Resorts.

3. With major expansion plans in Macau, Wynn Resorts' capital expenditures will soon start reaping cash-flow rewards that could provide even more money for dividends.
One of the biggest mistakes Wynn Resorts made was not moving aggressively to expand in the key Asian gaming market of Macau. Although the company joined Las Vegas Sands by building casinos on the Macau Peninsula, Wynn fell behind the curve and didn't develop in the newer Cotai Strip area as quickly.

Within the next two years, though, Wynn Resorts expects to complete its Wynn Palace project in Cotai. With some analysts expecting Wynn to make more in operating earnings with that single resort than it does with its Macau Peninsula properties, the company could have ample cash flow to boost its payouts to shareholders while still retaining enough capital to expand in other areas of Asia.

Wynn Resorts might not be a traditional dividend powerhouse, but it has all the characteristics of a budding favorite for those seeking income from their portfolios. Dividend investors should keep watch on how the casino giant performs in the future.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.