Ahead of the Bell: Casinos

Analyst says some casinos with Macau ties may experience continued growth going forward

Associated Press

NEW YORK (AP) -- Several casino operators with Macau ties are likely to see improved gains as the resort area continues its recovery.

David Bain of Sterne, Agee & Leach said in a client note that the sentiment is improving in Macau, the only place in China where gambling is legal. While revenue growth slowed in Macau last year, it has recovered in 2013.

Bain said that Melco Crown Entertainment Ltd. may initiate a dividend in the near term and has the potential to expand into Japan and possibly Taiwan as well. The stock closed Friday at $33.94, more than doubling since the start of the year.

At Las Vegas Sands Corp., the analyst foresees its dividend being raised to at least $1.60 or higher before year's end, along with the possibility of significant buybacks. Despite the positive view, shares slipped 68 cents to $67.65 in premarket trading. Shares closed Friday up 48 percent so far this year.

Bain said that Wynn Resorts Ltd.'s Cotai development appears on time and on budget, but that a potential special dividend that may come before year's end is likely to be smaller than usual given the funds being put toward Cotai and project bids for Boston and Philadelphia. Shares closed Friday at $166.61, up more than 48 percent year-to-date.

MGM Resorts International's Cotai project is also on time and on budget, the analyst said, and he expects its 2014 Las Vegas performance likely to go higher. Shares dipped 20 cents to $20.26 in premarket trading. The stock is up nearly 76 percent since the beginning of 2013.

Last month, the Nevada Gaming Control Board reported that casinos there took in $955.2 million in August — the biggest monthly amount in the past six months.

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