Las Vegas Sands will buy back US$2 billion worth of its own shares between now and the end of 2025 as it looks to capitalize on a combination of its strong balance sheet and a share price yet to recover from the COVID-19 pandemic.
Outlining the company’s plans during its 3Q23 earnings call on Thursday morning (Asia time), LVS President and COO Patrick Dumont said he saw share repurchases as adding greater value for shareholders in the short term than dividend payments – despite having resumed an interim dividend post-Q2.
“We want to return capital to shareholders in a meaningful way,” said Dumont. “We think there is a real benefit to reducing the denominator, we think it’s accretive, we think there’s a compound effect to share repurchases and so we’re looking forward to doing it on regular basis.
“The amounts are to be determined but you see the size the [board’s] authorization, you see our balance sheet strength, you see our cash flow we’re generating out of the business, so we’re going to be aggressive.
“We fundamentally believe in the dividend but if you look at the split that we had pre-pandemic versus return to capital, I think we’re looking to be majority share purchases and get that benefit.”
According to Dumont, LVS returned more than US$22 billion to its shareholders between 2012 and 2020 of which around 80% was by way of dividends. However, he reiterated, “As we consider our future capital returns, we expect share repurchases will be more heavily weighted than dividends as we believe share repurchases will be more accretive than dividends overtime as they reduce the denominator. We fundamentally believe in the compounding long term benefits of share repurchases.”
LVS Chairman and CEO Robert Goldstein added that the decision to repurchase US$2 billion in shares was also opportunistic given the current trading price of US$44.60 at market close, down from a high of US$74.06 in January 2020.
“Our stock is trading roughly at COVID levels so it’s hard not to look at the stock and be opportunistic,” he said.
The company’s balance sheet remains buoyed by last year’s sale of its Las Vegas assets for US$6.25 billion.
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