Few companies dominate an industry the way Las Vegas Sands (NYSE:LVS) does in casinos. The company has one of the biggest and most profitable casinos in Las Vegas, has the largest market share in Macao (the world's biggest gambling market), and has one of two lucrative casinos in Singapore. 

But being the biggest doesn't necessarily mean it's the best investment, and Las Vegas Sands' shares have actually fallen over the last five years despite the company generating billions in cash flow and buying back billions of dollars in stock. Here's a look at why the casino operator may finally be ready to break out of its rut. 

Macao's skyline filled with casinos.

Image source: Getty Images.

The cash flow machine

Las Vegas Sands shouldn't be looked at as a growth company today. Instead, it should be viewed as a cash flow machine. Once multibillion-dollar resorts are built, they stop being a cash sink and start to generate cash everywhere, from the hotel rooms and casino to the shops. That's how Las Vegas Sands generates over $5 billion in EBITDA, a proxy for cash flow, each year. 

You can see below that EBITDA has fluctuated but has been consistently over $3 billion for the last five years and is now peaking at $5.4 billion. 

LVS Total Dividends Paid (TTM) Chart

LVS Total Dividends Paid (TTM) data by YCharts.

Since there aren't any new regions for Las Vegas Sands to invest in, a large percentage of the cash flow goes to pay a lofty dividend, which is currently $3.08 per share annually, a yield of 5.3% at today's price. If you're looking for a great dividend stock, this would be a good place to start. 

How the cash flow story could crumble

The risk for investors is that Las Vegas Sands' cash flow isn't sustainable long-term. The biggest risk is Macao's gambling market going through another slump, and we've seen that play can shrink by 50% over the course of a year or two if China cracks down on money flowing to Macao. 

The good news is that Las Vegas Sands is much more prepared to absorb a shock like that today than it was a decade ago. When the financial crisis hit in 2008, the company hadn't fully ramped operations in Macao and was still building Marina Bay Sands in Singapore, so it had net cash outflows rather than the inflows we see today. Debt may have increased slightly over time, but cash flow has exploded and Las Vegas Sands is relatively conservative with a 2.2 debt-to-EBITDA ratio. 

LVS Financial Debt to EBITDA (TTM) Chart

LVS Financial Debt to EBITDA (TTM) data by YCharts.

Casino stocks are still riskier than many investment options on the market, but investors should understand that the company is in a much better place than it was a few years ago when investors were seriously concerned that bankruptcy was on the horizon. 

One big growth opportunity

I mentioned that Las Vegas Sands isn't really a growth stock today, but there's one event that could make it a growth stock again: winning a casino license in Japan. It's one of the companies bidding for a casino there and is focusing its bid on Tokyo or Yokohama. A resort may cost $10 billion to build, but it may also be the most profitable resort in the world when completed, so the company thinks it's worth the risk. 

Is Las Vegas Sands a Buy? 

I think this is a stock investors should buy, but maybe not for the reasons you would think. I don't see this as a growth stock, and even if the Japan bid works out, it'll be five years or more before any cash flow comes from the project. But this is a great dividend stock, and a 5.3% yield in today's market is nothing to scoff at. That alone would be why I would buy shares. Any growth from Las Vegas Sands' current operations or new developments would be icing on the cake.