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VICI Properties Inc. VICI has seen its stock rally 9.5% so far in the year, closing at $31.97 on Monday. It has outperformed not only the Zacks REIT and Equity Trust - Other industry but also the S&P 500 composite over the same time frame.
Last month, VICI, which specializes in gaming and entertainment properties, came up with its fourth-quarter and full-year 2024 results that reflected continued benefits from its expansion efforts and strategic investments. After the quarter ended, VICI revealed a strategic partnership with Cain International and Eldridge Industries, committing $300 million to a mezzanine loan supporting the development of One Beverly Hills.
Moreover, solid dividend payouts remain the biggest attraction for REIT investors, and VICI Properties has remained committed to that. It has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 8.05%. Check VICI Properties’ Dividend History.
However, before hastily deciding to buy this stock or book profits, it’s important to evaluate whether this REIT has the growth potential to sustain its dividend payments and to check whether the current concerns could significantly affect the company's long-term performance. Let’s delve deeper.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Is VICI Properties' Growth and Dividend Built to Last?
REIT investors are often drawn to strong dividend payouts, and VICI Properties stands out with a compelling ~5.5% dividend yield. Since 2018, the company has delivered an impressive 7% annual dividend growth rate, outpacing many triple-net REIT peers like Agree Realty Corporation ADC, Essential Properties Realty Trust, Inc. EPRT and Four Corners Property Trust, Inc. FCPT. With a commitment to distributing 75% of its adjusted funds from operations (AFFO) to shareholders, VICI offers a dependable income stream, making it an appealing option for dividend-focused investors seeking both stability and long-term growth.
Encouragingly, VICI Properties' dividend is backed by a solid and reliable foundation, as the company has established itself as a leading experiential REIT with a high-quality portfolio of gaming and entertainment assets. Anchored by iconic properties such as Caesars Palace Las Vegas, MGM Grand and The Venetian Resort Las Vegas, along with other top-tier gaming and experiential destinations across North America, VICI is well-positioned for continued growth. The company's strength is further reinforced by the resilience of the American consumer, particularly in the enduring demand for experiential entertainment.
VICI Properties boasts a diverse portfolio of 54 gaming and 39 experiential assets across North America, all backed by long-term triple-net leases with an average duration of 40.7 years. With a 100% occupancy rate, VICI’s properties are essential to its tenants, who encounter substantial regulatory and financial challenges if they were to relocate. This stability translates into reliable rental income, reinforcing the company's ability to sustain consistent dividend payments.
Moreover, for 2025, VICI expects 42% of rent roll with CPI-linked escalation, which is further projected to rise to 90% by 2035. This inflation-linked rent growth helps the company maintain purchasing power and revenue expansion, even in inflationary environments. Additionally, 74% of VICI’s rent roll comes from S&P 500 tenants, enhancing income stability and creditworthiness.
Since its founding in 2017, VICI has grown its adjusted EBITDA by 350%, expanding beyond gaming properties to include experiential assets such as Chelsea Piers and Bowlero. This strategic diversification strengthens revenue stability while mitigating sector-specific risks. Moreover, the company enjoys financial resilience with $3.3 billion in liquidity as of Dec. 31, 2024, giving it ample financial flexibility to navigate market fluctuations. VICI’s last quarter annualized net leverage ratio stood at 5.3, within its long-term target range of 5.0-5.5.