Dividend sustainability to be a concern, Wynn at risk, CS says

The sustainability of dividends at Macau’s casino operators is likely to become a major concern for investors as earnings deteriorate at the same time as capital spending requirements ramp up due to new projects, according to a Credit Suisse report.
“In light of the risk of earnings deterioration in 2015 but ongoing capex requirement for the upcoming projects, sustainability of dividend becomes one of the big concerns from investors,” analyst Kenneth Fong wrote in a note.
Wynn China is seen as the most likely to cut its payout to investors, the note said.
Sands China is the most capable of sustaining its dividend payments, while Galaxy Entertainment and Melco Crown Entertainment are both “flexible.” MGM China will see heavy capex expectations from its MGM Cotai project due to open in 2016, but the company is “incentivised” to maintain its dividend payment given the funding need from its parent company, MGM Resorts International, according to Fong.
Macau’s casino stocks fell more than 40 percent in 2014.