Chief Investment Officer Timothy Call of The Capital Management Corporation says there are a number of catalysts in place for Las Vegas Sands Corp. (NYSE:LVS), and he foresees double-digit earnings growth for the company over the next five years.
Las Vegas Sands is a leading mass-gaming company, with the number-one market share in China. Its two properties in Macau are the top tourist destinations for that part of China, and that is the Parisian, which is the end of the nation…
So not only has Las Vegas Sands opened the number-one tourist site in the region recently, the Parisian, but there are also bridges being built, the train line is being expanded and, most recently, Ferry Terminal being added to the Cotai Strip. Importantly, over the next two years, we might have completion of a bridge connecting Hong Kong to Macau.
So all of this will add to the profitability of Las Vegas Sands properties in Macau, which represent over half of its earnings. There are other catalysts for the stock, which include potential expansion into other areas of Asia. Japan just approved casinos, and Las Vegas Sands will compete to be one of those first allowed into Japan.
So we still see upside. So not only does the stock have a 5.1% dividend yield, which is very attractive, but when we look at its double-digit or our forecast of double-digit earnings growth over the next five years, even with evaluation multiple compression, we come up with an expectation of annualized double-digit total return for the stock over the next five years.