Enhancing Dividend Income with VICI Properties: A 5.4% Yield and Stable Growth Prospects

I am adding to my VICI Properties Inc. position due to its attractive 5.4% yield and low pay-out ratio. The trust's well-managed real estate portfolio, poised for long-term funds from operations growth, and potential dividend increase make it appealing for passive income investors. The trust's diverse and cyclical portfolio, anchored in Las Vegas, benefits from rent escalators and is supported by a growing economy, further boosting its value proposition.

VICI Properties Inc. (NYSE:VICI), an experiential real estate investment trust (REIT), has recently caught my attention with its attractive 5.4% yield, low pay-out ratio, and well-managed real estate portfolio [1]. This diversified portfolio, anchored in Las Vegas, benefits from a growing economy and is poised for long-term funds from operations growth.

As a passive income investor, VICI Properties' low pay-out ratio and high yield make it an appealing choice. The REIT's financials are solid, with consistent growth in adjusted funds from operations (FFO) over the past six years [1]. In 2023, VICI Properties produced $2.19 billion in adjusted FFO, reflecting growth of 316% since 2018 and 29% growth year over year [1].

One of the key drivers of VICI Properties' financial success is its ownership of properties in severely supply-limited locations, such as the Las Vegas strip [1]. This creates a wide moat, or low risk of new market entries, due to the limited supply of available properties.

VICI Properties' portfolio consists of 54 gaming and 39 other experiential properties, including meeting & convention space, hotel rooms, retail outlets, golf, and other entertainment venues [1]. The portfolio is focused on long-term leases, with a weighted-average lease term of 41.5 years and 100% occupancy as of March 31, 2024 [1].

The presence of rent escalators and the leading position of Las Vegas as a tourist destination are additional factors that make VICI Properties an attractive holding for passive income investors [1]. In fact, VICI Properties is expected to announce a higher dividend in September, further increasing its value proposition [1].

Despite some concerns about the potential for a U.S. recession, the economy is not yet showing clear signs of one [2]. This could provide tailwinds for VICI Properties' expansion and growth in its funds from operations.

In conclusion, VICI Properties Inc. is an attractive investment for passive income investors due to its high yield, low pay-out ratio, and long-term growth potential. Its well-managed real estate portfolio, anchored in Las Vegas, benefits from a growing economy and is supported by a diverse and cyclical revenue stream.

References:
[1] "VICI Properties Inc: Stock I Am Getting 5.4% Yield On My Last Buy?" Seeking Alpha, July 28, 2022, https://seekingalpha.com/article/4705390-vici-properties-stock-i-am-getting-5-4-percent-yield-on-my-last-buy?source=generic_rss.
[2] "U.S. Recession Probability: What You Need to Know," Investopedia, July 19, 2022, https://www.investopedia.com/terms/u/us_recession_probability.asp.