Genting SP: (The Edge) Will Genting SP strat paying dividends soon?
Analysts note that Genting SP appears to have the financial capacity to pay out a dividend. Based on last yr, cash flow was in excess of $1b, and capex were only abt $500m. Under Co’s existing debt covenenats, however there are restrictions on div distribution unless certain criteria are met.
Hence, most analysts are expecting that Co will only start paying div out in 2013, but add that there is a chance that Genting SP could pay a small div, to broaden its investor’s base to investors who can only invest in income generating stocks.
Overall, Genting SP still ranks as a Buy for most analysts. Co. is likely to get a boost from new rooms as it expands its portfolio of hotels to some 620 gaing tables. Co. also trades at a forward 10.9x Forward Ev/Ebitda. Add that at casinos in Las Vegas, non-gaming rev can make up almost half of casino resorts rev, suggesting that SG IR’s still have ample room to ramp up contributions from this sector. (currently 15.1%)
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