\n Posted on: October 17, 2024, 03:15h.\u00a0\n <\/p>\n
\n Last updated on: October 17, 2024, 03:15h.\n <\/p>\n
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<\/div>\n<\/p><\/div>\n<\/p><\/div>\nLas Vegas Sands\u2019 (NYSE: LVS) rising free cash flow could support the casino giant\u2019s ability to maintain and raise its quarterly dividend and repurchase shares.<\/p>\n In a new report, Moody\u2019s Investors Service said the Venetian Macau operator\u2019s retained cash flow to net debt ratio could jump to 33% over the next 12 to 18 months from 28.8% at the end of the second quarter. That increase would be supported by ongoing recovery in Macau where the company\u2019s Sands China unit<\/a> runs five integrated resorts.<\/p>\n LVS has historically returned a significant amount of capital to its shareholders,\u201d according to the ratings agency. \u201cPartly mitigating this concern is that LVS\u2019s consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) in normalized operating environments has more than covered cash outlays for cash dividends and distributions, maintenance capital expenditures, and the repurchase of common shares.\u201d<\/p>\n<\/blockquote>\n Moody\u2019s rates Sands \u201cBaa3\u201d, or one notch above junk territory, with a \u201cstable\u201d outlook.<\/p>\n After its payout had been suspended for more than three years as the gaming company sought to conserve capital during the early stages<\/a> of the coronavirus pandemic, Las Vegas Sands restarted its quarterly dividend in August 2023.<\/p>\n The resumption was to the tune of 20 cents a share per quarter \u2014 an amount that remains in place today. Prior to the global health crisis, LVS was a steady grower of its payout and one of the highest-yielding names in the gaming industry. Today, the shares yield 1.58%. Moody\u2019s said the company\u2019s payout costs $150 million per quarter.<\/p>\n<\/div>\n The research firm added it\u2019s possible Sands China restarts its dividend in 2025 \u2014 an outlook that jibes with what\u2019s been put forth<\/a> by Wall Street analyst. Currently, the Londoner Macau operator is one of three Macau concessionaires that doesn\u2019t pay a dividend and the only of the three US-based operators with Macau exposure that doesn\u2019t have a payout. Melco Resorts & Entertainment (NASDAQ: MLCO) and SJM Holdings also don\u2019t pay dividends.<\/p>\n Moody\u2019s pointed out that rising free cash flow could support Sands\u2019 ability to repurchase its stock, which it has done to the tune of $1.36 billion over the past year. The operator has $645 million left on a previously authorized buyback program<\/strong>.<\/p>\n Sands\u2019 liquidity position is robust with Moody\u2019s pointing out the operator has $4.7 billion in cash on hand and $4.4. billion undrawn on a revolving credit facility. The company is expected to spend $1.5 billion this year with the bulk of that directed to Londoner Macau and Marina Bay Sands in Singapore. Expenditures for 2025 are expected to decline to $1.15 billion.<\/p>\n A potential threat to Sands\u2019 credit rating is big spending on new projects, which Moody\u2019s says would likely be fund with debt. The operator is vying for a casino permit in New York<\/a> and has expressed interest in Thailand.<\/p>\n From a credit perspective it\u2019s potentially concerning that LVS \u201cwill continue to pursue further and significant global casino resort development opportunities that will likely be funded largely with debt, leading to temporary leveraging,\u201d concluded Moody\u2019s<\/strong>.<\/p>\n<\/div>\n![\"Macau](\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/08\/received_604626151785611-858x572.jpg\")
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Sands Dividend Outlook<\/h2>\n
Sands Has Strong Liquidity<\/h2>\n