Sheldon Adelson, chairman and chief executive officer of Las Vegas Sands Corp.
Kiyoshi Ota | Bloomberg | Getty Images
When casino company Las Vegas Sands announced that it was suspending its dividend, CEO Sheldon Adelson acknowledged that he was going against his own motto.
“I am known for the phrase, ‘yay dividends!’, and I assure you that it is still my mantra. But a strong balance sheet is also a vital and necessary component to realizing stockholder value in the decades ahead,” the billionaire said in a statement.
Indeed, Adelson, 86, is known for the phrase. He has been saying some version of it since at least April 2013 when he said “yay, return of capital” on an earnings call, according to FactSet, and he had refined it to “yay, dividends” by that October.
It’s been a quarterly staple ever since with more than 20 mentions on conference calls the last seven years.
Las Vegas Sands has backed up its CEO’s mantra. The company says it returned $26.9 billion in capital to shareholders between 2012 and the end of last year. It paid $3.08 per share in dividends in 2019.
Major companies across several industries have cut or suspended their dividends due to the impact of the coronavirus pandemic. Some of the aid for companies in the coronavirus relief bill passed by Congress also came with restrictions on dividends, putting distributions to shareholders in political crosshairs.
Casino stocks like Las Vegas Sands were some of the first U.S. equities hit by the virus crisis because it shuttered casinos and hotels in Macao. Adelson’s company has seen its stock fall by more than 30% this year.
Nobody is hurt more by Las Vegas Sands stopping dividends than Adelson himself, as he owns more than half of the company’s outstanding shares.
“My interests are in line with all the investors. I love dividends. That’s why I’m calling the phrase ‘yay dividends.’ I love buybacks. So my interests are exactly in line with investors,” Adelson said in 2015, according to a FactSet transcript.
Las Vegas Sands said last month that it will pay its employees while its casinos are closed. The company’s next earnings call, which will be the first to cover the coronavirus time period, is scheduled for Wednesday.
— CNBC’s Michael Sheetz contributed reporting.
Source: Investing - cnbc.com
