MGM, Wynn resume dividend distributions

Investment firms are optimistic in view of last week’s dividend resumption announcements from MGM China and Wynn Macau, marking their first dividend distributions since the onset of the Covid-19 pandemic.

MGM China announced it would pay a final dividend of HKD0.243 per share and a special dividend of HKD0.104 per share for 2023. Wynn Macau also announced a final dividend of HKD0.075 per share for the same year.

Following these announcements, analysts DS Kim, Mufan Shi, and Selina Li from J.P. Morgan noted Friday that the move came “a year earlier than the market had expected.”

With MGM China and Wynn Macau joining the ranks of dividend-paying gaming operators in Macau, the analysts anticipate Sands China will start distributing dividends next year. They expect Melco and SJM to focus on reducing debt for the time being.

J.P. Morgan’s analysts believe these dividends could attract a broader investor base and help stabilize the valuation of Macau’s gaming stocks.

Also on Friday, Morningstar analyst Jennifer Song wrote that “following Galaxy’s special interim and final dividend offerings, MGM China and Wynn Macau have followed suit and both declared final dividends on March 21. We view this as a positive surprise, which came in at least one year earlier than our expectations, suggesting that management groups are confident in Macau’s gaming demand recovery.”

Morningstar maintains their forecast for gross gaming revenue, which “will rise to 85% of 2019’s level in 2024, up from 63% in 2023. With that, we believe Macau casinos will record meaningful improvements in profitability and cash flows in 2024.” PC