WYNN Back On the Move After Ex-Dividend

With high levels of cash on hand and a less favorable tax possibly on the horizon, several companies have recently been electing to announce special dividends to return cash to investors. One such company in Wynn Resorts, Limited (Nasdaq:WYNN). After its third quarter earnings report, which met Wall Street estimates, the company said it would pay a healthy $8 per share dividend. Gambling revenues have soared this year for the casinos, especially in Macau where Wynn posted 50% revenue growth. Wynn said in the November 2nd report it was close to completing design work on a third Macau resort.

WYNN gapped down nearly 7% this morning after the ex-dividend, but has already taken back more than 2% of those losses during the session. The drop in stock price does not reflect a drop in value to shareholders after the dividend, and the move could be seen as a vote of confidence for a company swimming in excess cash. In these situations, it is reasonable to think the stock should recover from the ex-dividend inspired drop.

There are several other companies that found themselves in a similar position recently with cash on hand and elected to announce large special dividends. Some other recent large dividends (as a percentage of price), from AB Analytical Services: