Sands China Nears First Dividend Since COVID Pandemic

Posted on: February 19, 2025, 09:51h. 

Last updated on: February 20, 2025, 10:07h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Sands China could unveil first dividend in five years
  • Announcement could come as soon as Friday

Las Vegas Sands’ (NYSE: LVS) Sands China unit could soon announce its first cash dividend since the onset of the coronavirus pandemic five years ago.

Macau stocks
Sands China’s Venetian Macau. The operator could announce a new dividend as soon as February 21. (Image: Luxury Lifestyle Magazine)

In a new report to clients, Morgan Stanley analyst Praveen Choudhary said such an announcement could arrive as soon as Friday when the Macau casino giant conducts a board meeting. The analyst said it would be positive for Sands China stock if the operator announces a payout of at least or more than HKD0.20 per share.

We expect DPS (dividend per share) to grow back to HK$2 per share eventually (like pre-COVID), resulting in more than 12% yield,” observes Choudhary.

Of the six Macau concessionaires, three pay dividends and three do not. Sands China is joined in the latter category by Melco Resorts & Entertainment (NASDAQ: MLCO), and SJM Holdings.

Sands China Has Support of Parent Company

In April 2020 during some of the darkest days of the COVID-19 pandemic, Las Vegas Sands suspended its dividend less than three months after it boosted its dividend for the eighth straight year. Sands China’s payout was also halted as part of that cash-conserving effort.

The US-based parent reinstated the dividend in August  2023 and has since increased it twice while opting to not resume the Macau unit’s payout. LVS owns more than 70% of Sands China and is gradually increasing its stake in the Macau entity, indicating there’s financial support for the payout.

Should Sands China resume its dividend, the news would arrive against the backdrop of expectations that the operator will see improved earnings before interest, taxes, depreciation, and amortization (EBITDA) and gross gaming revenue (GGR) this year.

“Morgan Stanley forecasts Sands China’s mass market GGR share will climb to 26.0% in 2025. Revenue is expected to rise to $7.83 billion, and adjusted EBITDA is seen increasing 17% to $2.51 billion,” according to Seeking Alpha.

Dividend Could Add to Sands China Value Case

If Sands China restarts its dividend, it could add to the value case for the stock — one that analysts believe extends to nearly all Macau gaming equities. The asset class has lagged over the past several years, but dividends, particularly if they grow, could make it easier for investors to take a long-term view of the group.

Dependable payouts, including resumption by Sands China, could be the catalyst needed for Macau stocks to participate in what’s been an intense rally by mainland China and Hong Kong-listed stocks to start 2025.

The MSCI Hong Kong Index, of which Sands China is a member, is up 4.51% over the past week and data indicate investors from mainland China are increasing their purchases of stocks trading in Hong Kong.