The Motley Fool’s readers have spoken, and I have heeded your cries. After months of pointing out CEO gaffes and faux pas, I’ve decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first and are generally deserving of praise from investors. For reference, here is last week’s selection.
This week, we’re going to turn our attention to casino and hotel operator Las Vegas Sands Corp. (NYSE:LVS) and its highly philanthropic CEO, Sheldon Adelson.
Kudos to you, Mr. Adelson
Vegas tycoons are rarely lauded for their business approach or their philanthropy, but Sheldon Adelson is clearly making all the right moves of late.
One of the biggest success stories has been the overseas expansion of previously domestic casinos and resorts — specifically to Macau. Wynn Resorts, Limited (NASDAQ:WYNN) was the first to make the jump, and it enjoyed incredible success among high-end customers; in recent months, however, that hasn’t been the case. In its most recent quarterly report, Wynn recorded a 3% decline in Macau revenue as VIP table game turnover dropped nearly 7%. Wynn has suddenly found itself on the defensive as Las Vegas Sands’ Macau properties are raking in profits hand-over-fist.
During the same period, Las Vegas Sands reported record Macau revenue, with net revenue at the Sands China increasing 48%, net revenue at The Venetian Macau climbing 10%, and net revenue at the Four Seasons and Plaza Casino jumping 37%. One of the reasons Las Vegas Sands has remained so successful is its emphasis on appealing to a broader base of income earners. While Wynn tends to draw only the most affluent, Las Vegas Sands has been appealing to a rapidly growing middle-class in China.
These results are far and away better than what any other Las Vegas strip-based casino and hotel operator has reported recently. Caesars Entertainment Corp (NASDAQ:CZR), while a popular stop for me on my Vegas vacations, has no resort exposure in Macau and has struggled to grow given the incredibly slow rebound for Strip-based casinos. Caesars’ latest debt offering will push the company past the $21 billion in net debt mark — a figure I find completely unsustainable over the long run. Similarly, MGM Resorts International (NYSE:MGM), while having some exposure in Macau, is still heavily tied to the fortunes of U.S. gamblers. MGM hasn’t reported a non-adjusted annual profit since 2007, and, with 65% of its net revenue tied to slow-growing domestic markets in the third quarter, that isn’t likely to change anytime soon.
A step above his peers
In addition to appealing to the mass market crowds in Macau, Adelson’s Las Vegas Sands offers a few other perks which make him an incredible CEO.
First, Las Vegas Sands is doing a great job taking care of its shareholders. Last year, Las Vegas Sands paid out a $0.25-per-share quarterly dividend and doled out a $2.75 special dividend in December (as many companies did). In late January, Las Vegas Sands noted it would be boosting its dividend by 40% to $0.35 per quarter. This is important because Adelson owns 52% of the company, and a boost in his pocket means a boost in shareholders pocket’s as well.
What makes Las Vegas Sands a truly remarkable company, and Sheldon Adelson an incredible CEO, is the amount donated back to the community. Las Vegas Sands has multiple partnerships through its Sands Foundation in Las Vegas, Pennsylvania, Macau, and Singapore to help raise funds for educational and health purposes in the communities that it operates. It also, through the Sands 360 program, does what it can as a corporation to minimize its impact on the environment.