VICI Properties increases its dividend by more than 8%

Published on: September 8, 2022, 05:08h.

Last update on: September 8, 2022, 05:08h.

VICI Properties (NYSE: VICI), the largest casino owner in the United States, said today it is raising its quarterly price to 39 cents per share, an increase of 8.3% from current levels .

VICI dividend
Caesars Palace on the Las Vegas Strip. The company increased its dividend by 8.3%. (Image: CNN)

The move raises the Caesar Palace owner’s annual payout to $1.56 per share from $1.44. The gambling real estate investment trust (REIT) is yielding 4.31%, more than triple the dividend yield of the S&P 500 and well above the yield of 10-year Treasury bills.

The dividend will be payable on October 6, 2022 to shareholders of record at the close of business on September 22, 2022,” according to a statement issued by the New York-based company.

VICI made the announcement after US markets closed today. The stock fell 0.24% on Thursday, but is up 11% year-to-date, easily outpacing the broader market as well as the widely followed FTSE Nareit Equity REITS index. The gauge is down 16.68% this year.

VICI The Legacy of Dividend Growth

Investors often flock to REITs for above-average dividends and yields for the asset class – characteristics that VICI certainly compels.

The real estate company was created from the old version of Caesars Entertainment in October 2017, and with today’s dividend news, its streak of increasing payouts is now five years old. A member of the S&P 500, VICI is the largest experiential landlord in the United States and one of the leading owners of prestigious real estate assets on the Las Vegas Strip.

Through a series of recent transactions, the company not only owns Caesars Palace, but it also owns The Venetian and nearly every Strip location operated by MGM Resorts International (NYSE: MGM), except Bellagio and Cosmopolitan. .

Through the recently completed purchase of MGM Growth Properties, which was completed in late April, VICI added nearly 41,000 hotel rooms and 1.2 million square feet of gaming space.

VICI now owns the real estate assets of Excalibur, Luxor, Mandalay Bay, MGM Grand, Mirage, New York New York and Park MGM, as well as various regional casinos operated by MGM Resorts.

Sustainability of VICI dividends

Experienced investors know that even if a company increases its payout is generally a good thing, it is more important that the company has the resources to meet current payment obligations and continue to increase the dividend over time.

VICI ticks those boxes. Through the aforementioned acquisitions and others, the REIT has added several new streams of rental income. It is important to note that the company’s contracts with tenants are long-term – often a decade or more – and include indexations for inflation. The MGP deal alone generates over $1 billion in new rental income for VICI.

Additionally, VICI remains acquisitive, retaining a knack for deals large and small. Last month, the company announced that it was buying the Rocky Gap Casino Resort real estate assets in Flinstone, Maryland from Golden Entertainment (NASDAQ: GDEN) for $204 million.

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