Wynn Vegas
Source: Wynn Resorts.

Income investors turn to dividend stocks to get the income they need, and most dividend investors tend to focus on stocks that provide that income reliably and consistently. Yet some companies stand out from their peers by paying out immense special dividends from time to time, and casino giant Wynn Resorts (NASDAQ:WYNN) has a good track record of making large special payouts on a fairly regular basis, distinguishing it from the non-dividend paying MGM Resorts (NYSE:MGM). With the company also having boosted its regular quarterly dividends lately, some dividend investors see Wynn Resorts as a top dividend stock. Yet as Wynn's payout has climbed, concerns about its sustainability have arisen, especially since its dividend payout ratio is higher than rival Las Vegas Sands (NYSE:LVS) currently sports when you consider special dividends and regular dividends alike. Let's take a closer look at Wynn Resorts by doing a dividend payout ratio analysis to see if its healthy dividend yield is sustainable.

Dividend Stats on Wynn Resorts

Current Yield*

3.9%

Current Annualized Dividend Per Share*

$7.00

Earnings Per Share, Trailing 12 Months

$8.20

Earnings Payout Ratio*

85%

Source: Yahoo! Finance. * Includes special dividend.

Is Wynn still a dividend winner?
Whenever dividends start approaching the amount a company earns, dividend investors get nervous, and when you look back at the dividends that Wynn Resorts has paid over the past 12 months, it's evident why some people had concerns. After approving a dividend of $3 per share in late 2013, Wynn had raised its regular quarterly payout to $1.25 per share, and so some investors did the math and assumed that the total dividends over the course of the year would come close to the $8.20 in earnings that the company has produced.

Wynn Mass

Proposed Wynn Massachusetts casino resort. Source: Wynn.

But much of that concern stemmed from the confusing way in which Wynn described its dividend. Technically, the November 2013 dividend should have been considered to be a $1 regular quarterly dividend and a $2 special dividend, which would have equated to a forward expectation of $7 per share and the same payout ratio Wynn has now.

Fortunately, that's how Wynn handled its dividend increase this year. Last week, Wynn said it would raise its regular dividend to $1.50 per share quarterly, and add a special $1 per share dividend for the fourth quarter of 2014. Going forward, that means Wynn will still pay $7 per share on an annual basis.

Admittedly, an 85% earnings payout ratio gives some reason for concern. Most analysts aren't expecting a huge amount of growth in earnings per share for 2015, in large part because of worries about a slowdown in the company's key Macau gaming market. Yet for the most part, Wynn doesn't appear to be moving toward aggressively boosting its total dividend payments but rather simply characterizing more of its dividends as regular and fewer as special.

Looking to Wynn's dividend future
Dividend investors never like to see a company pay less in dividends than it did in previous years. But even the most devoted dividend investors know that special dividends carry their own rules. Once a company declares a regular dividend of a certain amount, it takes a substantial event to persuade that company to reduce its regular payout below that level. With a special dividend, though, investors acknowledge that the payout is tied to performance, and if that performance slips, then the special dividend can shrink or even disappear.

Wynn Palace Cotai
Wynn's proposed Cotai resort. Source: Wynn Resorts.

Even if Wynn's earnings don't rise considerably, the company could sustain its recent course simply by replacing its late-2015 special dividend with another increase in its regular quarterly payout. A future rise to $1.75 per share on a quarterly basis would leave Wynn with exactly the same margin of safety it has currently, and it would free up the company to consider extraordinary factors in making future special dividends rather than simply making them a part of investors' overall expectations year in and year out.

The biggest concern that Wynn Resorts shareholders should have is that the Macau market could finally start to experience substantial trouble in producing growth. With Wynn expecting to open a new casino resort on the Cotai Strip in the near future, anything short of solid success could bring even more short-term financial challenges to the casino giant. For now, though, the headwinds that Wynn faces aren't enough to force an immediate cut to the company's dividend.

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.