Las Vegas Sands

Methodology

Las Vegas Sands' earnings are heavily influenced by Macau gaming volumes, Chinese consumer spending, and regulatory factors, creating significant volatility and making normalization essential. Property development cycles and ramp periods also distort near-term earnings. Use mid-cycle normalized EBITDA or cash flow rather than reported earnings for more reliable valuation estimates.

Methodology

PEG analysis is problematic for LVS given extreme earnings swings from pandemic impacts, Macau policy changes, and property openings that create unsustainable growth bursts or declines. During recovery periods, growth rates appear exceptionally high off depressed bases. Focus on EBITDA-based metrics and property-level returns rather than earnings growth alone.

Methodology

Las Vegas Sands historically paid substantial dividends supported by Macau cash flows but suspended them during the pandemic, highlighting earnings and cash flow volatility. Dividend restoration depends on Macau recovery and leverage reduction priorities. When paying, the yield was meaningful for this capital-intensive gaming operator.