Las Vegas Sands' Dividend Is Among The Safest Out There

Las Vegas Sands Corp. LVS shares closed Monday's session up about 1.5 percent; the stock slightly outperformed the Dow Jones Industrial Average and S&P 500, which closed up about 1 percent and 0.98 percent, respectively.

Some traders attributed the modest strength in shares to earlier positive comments from CLSA analyst Jon Oh.

"We believe LVS’s dividend is among the safest out there," according to Oh, who recently attended a road show hosted by the company.

The analyst pointed to several factors that strengthen his confidence in the dividend.

• "The company is realistic about the range-bound GGR trends and crystal clear about the need for GGR to grow in tandem with supply, albeit at a varying pace, in order to sustain the market at the current cost structure."
• "While we maintain our long-term thesis that the sustainable transformation of Macau calls for a dependence on higher volume of lower-value customers, that phenomenon inherently requires a longer timeframe to play out."

Given these, Oh suggested only two metrics in Macau matter over the near term: net mass win per day and daily opex.

"The former is up to the Gambling Gods, while the latter has been well managed by LVS to a point where we think incremental cuts are no longer strategic, hence our concerns over expectations for continued margin
expansion," according to Oh.

CLSA maintained an Outperform rating and $50 price target on shares of Las Vegas Sands.