VICI Properties Stock Analysis: High-Yield REIT Stock to Buy Now? NYSE: VICI Stock Analysis

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Nowadays, a majority of dividend stocks are affected by the Fed’s decisions regarding interest rates, and we can see many of them down 30, 40 or even more than 50%. However, VICI Properties (NYSE: VICI), a real estate investment trust specialized in casino and hospitality real estate is not one of them.

With the exception of the 2020, since the IPO, the stock has always been relatively stable, and the dividend grew by around 40%. Currently, they are paying an almost 6% dividend, but we have to take into account a potential boost in price following the Fed cutting the rates. Many real estate investment trusts have lost their - let’s say attractiveness - because right now you can get like 5% from treasuries, so there is not much of a reason to risk it with a stock. However, once the rates get lower and treasuries pay close to nothing again, we can expect a nice boost for dividend stocks.

VICI has some very high-quality real estate and something interesting that I saw: during the pandemic, they collected 100% of the rent, in cash and on time, so you can see that there is quite a bit of resilience.

Something I really don’t like about the company is the fact that two tenants bring in around 75% of the total rent, so if there is an issue with any of them, VICI can be in big trouble. You know, MPW, another REIT got a lot of - let’s say “heat” - for having around 20% of its rent coming from one tenant. Sure, healthcare is a very different environment than casinos right now, but it's a risk to keep in mind. I had a quick look at these companies and from what I can see, MGM is fine, but Caesars has a lot of debt and has actually been losing quite a bit of money in the past years. If you are interested in VICI, you should definitely look very well into these two. They have triple net leases and inflation-linked rent escalators, which at least is a plus.

VICI was founded as part of a bankruptcy reorganization of what was in 2017 Caesars, so there is a bit of history between the two. Before they had a merger with the REIT owning MGM’s properties in 2022, Caesars was by far the number one tenant. The company has always been expanding, so this exposure should get lower and lower in time.

Following the merger, they can now produce around $2.1 to $2.2 billion in AFFO, and they even increased the guidance for 2023.

The debt is spread pretty much evenly throughout the decade and with the exception of next year when they only have to pay $1 billion, they need around $1.5 to $2 billion per year.

The issue is that they need around $430 million per quarter for the dividend, so let’s say $1.7 billion per year. If they keep issuing shares and increasing the dividend, they might have a bit of an issue in a couple of years, but they have half a billion in cash and they can always issue more debt.

Like with almost any real estate investment trust, it’s pretty much in the nature of the business to issue shares if you want to grow. The number of shares increased by around 5% year-over-year, which is definitely something to be aware of.


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On my channel, you will find a wide variety of stock analyses - from gold miners such as Barrick Gold (NYSE: GOLD) and Newmont Mining (NYSE: NEM) to tech stocks like Nokia (NYSE:NOK), Alphabet (NYSE: GOOG/GOOGL), Intel (NYSE: INTC) and even healthcare REITs like Medical Properties Trust (NYSE: MPW) and Omega Healthcare Investors (NYSE: OHI).

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0:00 VICI Properties Stock Analysis
3:43 VICI Properties Stock Valuation
5:23 Target Price & Conclusions

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