Las Vegas Sands'
We've already seen reports from MGM Mirage
MGM is at the bottom of the heap for me. Yes, yes, I know that its stock has been a tremendous performer over the past few months, and that it has CityCenter still on the horizon. However, it also has the weakest financial position of the major public players and has a lot of Las Vegas properties that have been marginalized by recent Strip development, and will be further marginalized when CityCenter launches. And, hey, there's a reason that Dubai World was excited to make CityCenter remote from any MGM bankruptcy.
But we're talking Las Vegas Sands here, not MGM. So what's the difference? A major part of the difference is that Sands is far less levered to The Las Vegas Strip than MGM. Over 65% of Sands' adjusted EBITDA from its properties came from its Macau properties in China, and overall, Macau seems to have been holding up better than The Strip. Plus, the properties on The Strip that it does own -- The Venetian and The Palazzo -- are very high quality.
And Sands is only going to get more diversified geographically. The company has two projects under construction -- Marina Bay Sands in Singapore and Sands Bethlehem in Bethlehem, Pa.
But right now, financial strength is what we need to focus on with the gaming companies. After all, it won't mean squat to equity investors how well the casino properties do if they get wiped out in bankruptcy. For now, Sands appears to be in relatively good position.
Although it carries a hulking $10.4 billion debt load, it has $2.8 billion in cash on hand. Interest coverage based on EBITDA was a somewhat tight 2.5, though interest coverage based on adjusted EBITDA -- which excludes pre-opening expenses -- was a downright comfortable 3.2.
The Venetian is hands down my favorite poker room on The Strip, and if Las Vegas Sands continues to plug away like this, it could move up the list to be one of my favorite gaming stocks.
Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool. The Fool's disclosure policy can turn sand into glass.
More from The Motley Fool
Why Las Vegas Sands Corp. Shares Popped 35% in 2017
Macau's growth sent shares higher, but there are some concerning signs heading into 2018.
Macau Casinos Are a Good Bet Now After Big Gaming Revenue Miss
The VIP gamblers' hot streak will soon turn cold again.
Why 2017 Was a Year to Forget for Las Vegas Sands Corp.
Market share losses began in 2017 and may not end anytime soon.