Las Vegas Sands (NYSE:LVS) recently posted solid first quarter numbers that easily beat analyst expectations on the top and bottom lines. Its revenue rose 17% annually to $3.58 billion, topping estimates by $100 million and marking its highest growth in three quarters. Its adjusted earnings surged 58% to $1.04, beating expectations by $0.19, as its hold-adjusted property EBITDA climbed 20% to $1.37 billion.

Yet Sands' stock didn't rally after that report, presumably due to investor jitters about American companies too heavily invested in China. Sands' biggest money-maker is Macau, which generated over half of its hold-normalized adjusted property EBITDA during the quarter.

Sands' main properties.

Image source: Las Vegas Sands.

However, I think Sands is fairly well-insulated from escalating trade tensions between the US and China, which are focused more on commodities and tech companies. So today, let's dig deeper into Sands' first quarter and highlight three reasons you should buy this stock.

1. Macau's growth

Sands' biggest market is still a growing powerhouse. Its hold-adjusted property EBITDA in Macau rose 29% annually to $767 million last quarter, accounting for 56% of the company's total. Its total revenues in Macau rose 17% to $2.16 billion, or 60% of its top line.

Sands dominates the newer Cotai Strip area with four of its five Macau properties. Its total market share (in historical adjusted property EBITDA) in Macau rose from 28% in 2012 to 33% last year. During that period, Wynn's (NASDAQ:WYNN) share grew just one percentage point to 17%, while MGM's (NYSE:MGM) share dropped from 10% to 7%.

Macau's total gaming revenues rose year-over-year for 20 consecutive months through March. Analysts expect that streak to continue with about 20% growth in April. More mainland tourists, supported by rising income levels, are visiting Macau and spending more money at Sands' resorts. The SAR (Special Administrative Region) experienced a 10% increase in visitors from mainland China over the past 12 months.

Macau's skyline.

Image source: Getty Images.

The Hong Kong/Zhuhai/Macao bridge, which links the mainland and two SARs of the Pearl River Delta, will also open later this year and enable buses to bring in visitors at a faster rate than ferries. Sands intends to add about 3,400 hotel rooms to its Macau resorts by 2020 to support that growth.

Sands estimates that the number of outbound tourists from mainland China will increase from 135 million to 260 million between 2016 and 2025, with their expenditures surging from $261 million to $672 billion. Macau currently ranks second in outbound tourism behind its neighboring SAR Hong Kong.

The Chinese government also recently approved the commercial development of nearby Hengqin Island, which is linked to the Cotai Strip via a bridge. Sands believes that the island's development will contribute to Macau's "diversification and to its further development as a business and leisure tourism destination."

2. It's becoming an Asian powerhouse

Many Sands investors focus heavily on Macau, but the region is merely the foundation of its growing Asian business. Revenue at the Marina Bay Sands in Singapore rose 27% annually to $872 million -- or 24% of Sands' top line -- last quarter. Its hold-adjusted property EBITDA rose 11% to $430 million, or 32% of Sands' total.

Looking ahead, Sands plans to spend up to $10 billion on a new resort in Japan, which recently legalized casinos. Sands is in a much stronger position to expand in Japan than its rival Wynn, which is hobbled by a weaker MICE position, a bruising legal battle with former vice chairman Kazuo Okuda over bribery allegations in the Philippines, and the recent downfall of founder Steve Wynn.

A roulette table.

Image source: Getty Images.

CEO Sheldon Adelson is also mulling the development of a new resort in South Korea that would allow the development of casinos for tourists -- but, notably, would ban South Korean citizens. Over the next decade, these projects could support Sands' continued growth across Asia.

3. A reasonable valuation and a high dividend

Analysts expect Sands' revenue and earnings to rise 5% and 12%, respectively, this year. The stock isn't cheap, but it's reasonably valued at 21 times this year's earnings and 20 times next year's earnings.

Sands' forward yield of 4%, which is much higher than Wynn's 1% yield and MGM's 1.4% yield, should also protect the stock during market downturns. Sands has raised its dividend annually every year after it started paying one in 2012.

The bottom line

Las Vegas Sands is a "best in breed" player that dominates the world's hottest casino market. It has plenty of irons in the fire, pays a hefty dividend, and trades at reasonable valuations. Therefore, I'd be looking to buy more shares of Sands, not sell them, if the stock gets dragged down by market turbulence.

 

Leo Sun owns shares of Las Vegas Sands. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.