The casino industry has gone through lots of challenges and upheavals in the past. Macau, the hub of the casino business, has been affected by stringent government laws that restricted the use of casinos in China. Due to these strict laws in force, many giants like Las Vegas Sands (LVS, Financial), Wynn Resorts (WYNN, Financial) and MGM Resorts International (MGM, Financial) suffered huge losses right from the second quarter of last year. With the industry going through a rough phase and share prices trading at all-time lows, the casino industry presents a good opportunity for investors who are willing to take some risk with their money. If the industry is your cup of tea now, this is the right time for you to invest in this sector. Experts recommend that when compared to other two names, Las Vegas Sands is a good option to invest in right now because of a variety of reasons. Here, we will see how this stock has outperformed its competitors in various ways.
Great infrastructure
Las Vegas Sands operates two of the most successful resorts in Macau - Sands Cotal Central that has 5,723 rooms and the very popular Venetian Macao, which has 2,905 rooms which generates the maximum amount of revenue for LVS ventures in Macau. During early 2016, Las Vegas Sands will open yet another luxurious resort along the Cotai Strip called The Parisian. This resort will have 3,000 rooms and will be equipped with all kinds of ultra-modern facilities. With these three resorts, Las Vegas Sands will look to attract middle class citizens. The external market conditions are favourable for the casino giant now as the economy is in a flourishing stage and standard of living of middle class people has increased considerably. Due to this, more and more number of people are visiting casino resorts these days, leading to increased revenues for Las Vegas Sands. Wynn Resorts and MGM Resorts International too are eyeing the Cotai Strip for setting up new resorts. However, these resorts will have a maximum of 2,000 rooms and are set to open quite late, thus giving Las Vegas Sands a clear advantage. Current and future projects of Las Vegas Sands contribute to a whopping 12,677 hotel rooms, which is more than other players by a huge margin.
Success in Singapore - a key reason
When most of the other casino stocks were thinking twice about investing in Singapore, Las Vegas Sands took a bold decision to open a casino there despite tough rules. There were two licenses open in Singapore, and Las Vegas Sands successfully re-claimed one of them in 2013. It did amazing business last year as a result of which, it had a successful Q4 last year – a time when most of the other big names in the casino industry, were struggling to sustain in the business. Due to this success, Las Vegas Sands might soon set foot in Japan once the government there permits casinos in the country.
Reasonable growth of dividends
Las Vegas Sands is one of the top choices for investors looking for a good income because it has been consistently increasing its dividends over the last few years. The top management of the casino giant is also involved in a large number of share repurchases every year; hence you can be assured of the value of your money if you invest in this.
Dividends have grown by a whopping 150% from what they were during 2012 and this alone should give investors a strong reason to invest in Las Vegas Sands. Currently, the dividend yield of the company is 4.57%, which is indeed great, considering the overall bad situation that the casino business is in right now. In the current situation where casino stocks are facing tough challenges, Las Vegas Sands has been the stand-out performer purely because of its business strategies and focus on investor worth.
Conclusion
It is not always that winners do different things. More often than not, winners do things differently. That is exactly the case with Las Vegas Sands. When other casino stocks were overly dependant on Macau, they got hit severely when the government rules and regulations became stringent there. Las Vegas Sands, on the other hand, though did suffer as it had a huge business in Macau, was able to come out unscathed from this trouble, because it had invested in other areas like Singapore as well for its success. This came in good stead for the stock when the market conditions in Macau turned hostile for the casino business.
