Las Vegas Sands Remains an Easy Bet

The gaming giant continues to sail ahead with Macau's winds at its back. With another round of record results under its belt and even better times ahead, what's there not to like?

May 3, 2014 at 10:00AM

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.

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.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


Michael Lewis has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers