Investment bank UBS projects that Sands China’s dividend per share (DPS) could rise to HK$1.0 ($0.13) in FY25, offering a yield of around 6 percent.
This growth is expected to be driven by the ongoing expansion of the Londoner Phase 2 and anticipated market share gains. By FY26, Sands’ DPS could reach HK$1.5 ($0.19), which represents 9 percent yield, marking a significant rebound compared to the pre-COVID average yield of 4 percent.
In an investment memo released after the company announced its dividend payment resumption last Friday, UBS commented that Sands China had made an early move in its recovery. The company announced a full-year dividend of HK$0.25 ($0.032) per share for FY24. This marks Sands’ first dividend payment since the COVID-19 pandemic, signaling a positive outlook for shareholder returns.
The announced dividend, offering a yield of approximately 1.5 percent, exceeded consensus, which had anticipated a resumption of dividends around mid-2025. The payout represents about 25 percent of earnings per share (EPS) and 30 percent of free cash flow (FCF) for FY24, reflecting the company’s strong financial health moving forward.
According to checks by AGB, the market responded positively to the news, with Sands China’s shares jumping 5.24 percent on the first trading day after the dividend announcement. Other Macau gaming operators saw gains as well, with Galaxy Entertainment—who resumed dividend payments a year ago—rising by 4.41 percent. Other gaming concessionaires saw their stock prices increase by 1.48 percent to 3.72 percent, reflecting investor confidence in the sector’s ongoing recovery.
Morgan Stanley, which had expected a more conservative dividend of HK$0.20 ($0.026) per share for FY24, noted that the HK$0.25 ($0.032) dividend was in line with their forecast but lower than some investors’ expectations of HK$0.50 ($0.064) per share.
The brokerage expects Sands to increase its DPS to HK$0.70 ($0.09) in 2025, with interim and final dividends of HK$0.30 (0.039) and HK$0.40 ($0.051), respectively, yielding 4 percent. If Sands meets Morgan Stanley’s more bullish projection of HK$1.0 ($0.13) per share in 2025, the yield would climb to 6 percent, the highest in Macau’s gaming sector.
In the past, Sands paid an annual dividend of HK$1.99 ($0.26) per share regularly between 2014 and 2018. The market anticipates the company will return to similar levels as EBITDA recovers to pre-COVID levels, which could happen by 2027 or 2028. At that point, the dividend yield could reach as high as 12 percent, based on the current share price.
