Las Vegas Sands (LVS) is one of the premier companies in the gaming industries and owns multiple casino’s across the world, including the Venetian and Palazzo in Las Vegas. On July 16th, 2014 LVS announced second quarter adjusted earnings of $0.85 per share, which is a 30.8% year over year growth. Total revenue came in at $3.62 billion, a 11.7% year over year increase, due to a strong performance by their Las Vegas properties.
Despite growing both revenue and earnings from 2013, LVS share has dropped pretty significantly in the past few months. This was primarily due to a decrease in revenue from Macau, where LVS generates 80% of their revenue. In August alone, Macaue revenue fell 6%, due to increased restrictions imposed by Chinese officials in order to stop gamblers from siphoning billions of dollars from mainland China to Macau. Even though they saw a set back in Macau, LVS did extremely well with their Las Vegas properties. Tourism isn’t back even close to pre-recession levels, but it’s on it’s way back.
Moving forward, LVS has a 3.17% annual yield along with a 53% payout ratio. The payout ratio is a little on the high end, but LVS is already well poised strategically and financially to grow revenue for years to come. If the share price does drop into the mid $50’s, LVS looks to be a great addition to any dividend portfolio moving forward.
For a more detailed analysis, check out the video below!