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In our view, Las Vegas Sands Corp. (NYSE:LVS) is without question the best operator in Macau, with higher EBITDA and net revenue than competitors Wynn Resorts, Limited (NASDAQ:WYNN) and MGM Resorts International (NYSE:MGM). Las Vegas Sands is very shareholder-friendly. The company has returned over $11 billion in capital to its shareholders over the last 14 quarters, with its dividend increasing by 40% in 2012, 42.9% in 2013, and by 30% in 2014. Because of its dividend increases, Las Vegas Sands pays a dividend yield of 4.74%, almost double the ten year yield.
Management has also been buying back shares. The company bought $65 million in common stock at a weighted average price of $50.46 per share in the second quarter, retiring about 1.288 million shares. Given that Las Vegas Sands’ 52 week low was $49.57, it seems that the company could be intent on defending the $50 per share level. With $1.7 billion left in its share repurchase program, Las Vegas Sands has plenty of cash to support the level if it wants.
Although management has increased the dividend before, we don’t see the company raising its dividend until Macau bottoms. With a forward P/E of 19.7, shares are not cheap versus the S&P 500’s forward P/E of 18. We would wait on the sidelines until Macau bottoms before entering a position.