Source: Las Vegas Sands website.

Investors are often wary of high-dividend stocks. There is good reason for this skepticism, as sky-high dividends are sometimes a precursor to a devastating dividend cut. When a company's stock price falls, this elevates its dividend yield, which could be a red flag that the underlying business is in deep trouble.

But other times, the market is simply irrationally punishing a company by sending its stock price too low. In these situations, the unjustified selling actually amounts to a great buying opportunity. I believe this is what's happening with Las Vegas Sands Corp. (NYSE:LVS), a stock that recently crossed the 5% dividend yield mark and as of Friday's closing price had a yield of around 4.8%.

While Las Vegas Sands has its fair share of challenges, the underlying fundamentals continue to support its generous dividend payout. The company is taking steps to diversify its business, and any recovery in its key geographic market could spark a rally.

Macau downturn takes its toll
The biggest factor working against Las Vegas Sands is the gaming slowdown in Macau, the only region in China where casinos are allowed. China is a critical market for Las Vegas Sands, since gambling is very popular there, and China is the most populous country in the world. But China's crackdown on criminal activity and the broader weakness in China's economic growth have had a significant impact on gambling revenue. For example, Las Vegas Sands' revenue fell 25% in the first quarter, to $3 billion, and operating profit fell 37% in the period, due in large part to declines in China.

Sands China represented approximately 58% of the company's total revenue last quarter, but Las Vegas Sands is slowly diversifying its operations. Its MICE strategy, which stands for Meetings, Incentives, Conferences, and Exhibitions, calls for pursuing projects outside of traditional casinos. The company holds a large retail mall format in Asia that is thriving. Revenue from the company's retail mall tenants on Macau's Cotai Strip, including The Venetian Macao, Four Seasons Macao, and Sands Cotai Central, as well as the Marina Bay Sands in Singapore, grew 17% last quarter, year over year.

Other areas are improving for LVS. Las Vegas is stabilizing, as net revenue there declined just 1% last quarter year over year. Separately, revenue at Sands Bethlehem in Pennsylvania grew 9% last quarter.

Compelling cash returns a positive catalyst
It's unclear when Macau will see a total recovery, but in the meantime, Las Vegas Sands pays its investors very well to wait for the turnaround to materialize. The company aggressively returns cash through both its generous dividend and high share repurchases. Its most recent quarterly dividend payment was a 30% year-over-year increase. And, since the inception of the company's share repurchase program in June 2013, the company has returned $2.23 billion to shareholders through the repurchase of nearly 31.0 million shares.

If the dip in gaming revenue proves to be cyclical, Las Vegas Sands will be in position to capitalize. Its massive, $3 billion Parisian Macau project, which will feature roughly 3,000 rooms and suites, gaming space, a retail mall, and even a replica Eiffel Tower, is almost completed.

Until then, investors can bet on Las Vegas Sands' high dividend. The company generates enough cash to afford its hefty payout. It raked in $3.6 billion of free cash flow last year, and its dividend cost the company $2.3 billion. This comes out to a comfortable 63% free cash flow payout ratio. Returning cash helps provide investors with a margin of safety until conditions improve. With regard to Macau, while Las Vegas Sands' management did not offer a guarantee that things would get better in the short term, company Chairman Sheldon Adelson did say he was as confident in Macau's long-term promise as he's ever been.