Wall Street Loves This Casino Stock That Resumed Its Dividend Last Year

Investing

Published: April 10, 2024 8:40 am

There are many reasons for investors love dividends. They provide evidence that a company is financially healthy enough to reward investors. Dividend stocks tend to outperform in market downturns and recessions. Dividends may offer tax advantages and help mitigate losses. And they offer total return (stock appreciation plus distributions), which is attractive for investors interested in income. So a notable dividend hike, like at Las Vegas Sands Corp. (NYSE: LVS) last year, is sure to garner investor attention.

After suspending its quarterly dividend during the pandemic, Las Vegas Sands resumed its payout to shareholders last year with a pair of $0.20 per share distributions. The first dividend for this year was also $0.20 per share. Note that the last payout before the suspension was for $0.79 a share. That dividend had been growing annually since it was at $0.25 per share in 2012. That’s a good track record, but due to the pandemic, the company has hit the reset button and has a long way to go to become a Dividend Aristocrat. Those are companies that have increased their payout every year for at least 25 years.

Las Vegas Sands’ Prospects

Las Vegas Sands develops, owns, and operates integrated resorts in Macao and Singapore, including the Venetian Macao Resort Hotel, Londoner Macao, Parisian Macao, Plaza Macao, Four Seasons Hotel Macao, and the Sands Macao, as well as Marina Bay Sands in Singapore. Its integrated resorts feature accommodations, gaming, entertainment and retail malls, convention and exhibition facilities, celebrity chef restaurants, and other amenities. (See the most popular hotel brands according to baby boomers ranked.)

The company was founded in 1988 when entrepreneur Sheldon Adelson and his partners purchased the Sands Hotel and Casino on the Las Vegas Strip. The company went public in 2004 and is based in Las Vegas. Competitors include Caesars Entertainment Inc. (NASDAQ: CZR), MGM Resorts International (NYSE: MGM), and Wynn Resorts Ltd. (NASDAQ: WYNN).

Las Vegas Sands was recently included again on the Fortune’s most-admired companies list. This was its tenth appearance on the list. Newsweek also named it one of America’s most responsible companies. Back in January, the company reported fourth-quarter earnings that fell short of forecasts, even though revenues were better than expected. The CEO told CNBC he was happy with the results given Macao’s ongoing recovery from the pandemic.

The share price increased only 2.4% last year but is almost 7% higher so far this year. Most of that gain followed the most recent earnings report. The stock has been trending higher since hitting a 52-week low of $43.77 back in October. The consensus price target is up at $64.26. That indicates that analysts anticipate over 22% further upside in the next 52 weeks. Out of 17 analysts who cover the stock, 12 recommend buying shares.

Top shareholders include Vanguard, Blackrock, State Street, and Bank of New York Mellon. The stock also is a top pick of billionaire investor Leon Cooperman.

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