Las Vegas Sands (LVS) reported better than expected results for the third quarter, as earnings climbed to $0.82 per share. The beat came against slightly higher than hoped Q3 sales of $3.57 billion. But, despite the solid quarter, you may find competitors Penn National (PENN) and Wynn Resorts (WYNN) more profit friendly through year end.
According to data compiled by the Seasonal Investor, Las Vegas Sands has traded higher a respectable 6 of the 8 Q4s since its 2005 IPO. However, its 9.01% median return for the quarter comes with high risk. The standard deviation of those returns has been a whopping 38%.
Instead, Penn and Wynn have both gained more often in the quarter than Las Vegas Sands, and both have not only produced higher median returns but have done so with less volatility and a lower correlation to the broader market.
Macao helps Wynn and Penn spin off real estate
Las Vegas Sands quarterly results were boosted by strong gaming results in Macao, which pushed Macao adjusted property EBITDA 81% higher year-over-year. All-in, company results were strong enough for the company's board to boost its annual dividend by 43% to $2 per share.
The company's strong showing in Macao should translate into solid results for Wynn's operations there too. In Q2, Wynn's Macao occupancy was 95.5%, up from 90% the prior year. That led to a 5% lift in revenue per available room in the quarter.
The picture is muddier at Penn. Unlike Las Vegas Sands and Wynn, Penn doesn't boast Macao operations. Instead, it relies on a large portfolio of gaming properties in the United States.
In Q3, Penn missed analyst forecasts, withdrew full year guidance and suspended the practice of offering forecasts. Penn's U.S. centric gaming approach remains weighed down by economic uncertainty.
However, Penn is spinning off its real estate into a REIT before year end and the company is far from losing money. Sales grew 1% in the quarter, generating $0.40 in earnings per share. Penn also continues to grow, with a $610 million purchase of Maryland Heights Harrah's from Caesar's (CZR) earlier this year.
Source: Seasonal Investor Database