Las Vegas Sands Remains an Easy Bet

Perhaps predictably at this point, Las Vegas Sands (NYSE: LVS  ) reported a record quarter last week on the back of robust growth in Macau -- a story that has been on the lips of every gaming analyst for a decade, yet is still delivering. Las Vegas Sands is a giant in the industry, not only by market cap and earnings, but also by sheer number of hotel rooms, slot machines, tables, and resorts around the world. The company is growing at a truly incredible rate, justifying its rich earnings multiple. With plenty of new opportunities on the horizon and continued outperformance in the gold mine that is Macau, however, investors can still make a mint on this one.

Winnings
For its first fiscal quarter, Las Vegas Sands brought in more than $4 billion in sales -- a completely absurd amount of money and a record for the company. Adjusted Property EBITDA, driven by Macau, grew roughly 50% year over year to $940 million. At the end of the income statement, the company hauled in 36.6% higher earnings than in the year-ago period, reaching $0.97 per share and setting yet another company record for the first quarter.

In three months, 17 million people came through the doors of Las Vegas Sands' Macau-based casinos. The Venetian Macau saw its sales rise 35%, with both gaming and non-gaming revenue soaring well into the double digits. The Sands Cotai (the Cotai Strip is the equivalent of the Vegas Strip) generated nearly 5 million visits alone, and delivered even more attractive results on the income statement, with an EBITDA margin north of 30%. Shopping revenue growth at the stores appears less robust than at the older property, but gaming is climbing at an incredible rate -- 40.6% in the just-ended quarter.

For Las Vegas Sands' various resorts and casinos in Macau, sales and earnings were altogether terrific. Back home, things were predictably slower. Las Vegas gaming revenue was down more than 31% compared to 2013's first quarter. Really, though, the U.S. hasn't been part of Las Vegas Sands' story for some time. This business takes place in Asia.

Good times are a-rollin'
Macau growth will slow eventually as the market matures. A Sterne Agee analyst recently pegged full-year 2014 growth at 14%-16%, as compared to 2013's 18.6% regional growth rate. Citi thinks the number could be as high as 22%.

Las Vegas Sands has plenty to gain in the coming years from its existing resorts and under-construction ones. The Parisian Macau, slated for a late 2015 opening, will substantially increase capacity and capture even greater market share for the company for years to come.

Beyond Macau, the company has the potential to tap into other Asian markets -- Japan, Taiwan, and Singapore, specifically. The last of the three is already generating meaningful revenue, with an adjusted property EBITDA of $435.2 million in the first quarter. Legislation in the other two areas is pending. If those floodgates open, Las Vegas Sands and its peers will have decades more growth to enjoy, and investors will undoubtedly benefit in time.

With a 43% year-over-year dividend hike and substantial capital appreciation in the recent past (and likely going forward), Las Vegas Sands is a stock that many can love. It's an income-earning growth stock with strong emerging market presence and a rock-solid core base. With the exception of bargain hunters, this is a great business to own for nearly any investor.

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