When it comes to VICI Properties Inc. (NYSE: VICI ), an experiential REIT that owns some of the most iconic assets on the Las Vegas Strip, analysts seem to love the stock while investors seem disappointedContributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes only and I encourage everyone to do their own due diligence. ...

VICI Properties Inc. (VICI) , which specializes in gaming and entertainment properties, reported its fourth-quarter and full-year 2024 results late in February. The company continued to benefit from its expansion efforts and strategic investments.VICI’s fourth-quarter 2024 adjusted funds from operations (AFFO) per share of 57 cents came in line with the Zacks Consensus Estimate. Moreover, the figure increased 3.6% from the prior-year quarter. Results reflected a year-over-year rise in revenues, mainly drive ...

Core Viewpoint - Vici Properties has experienced significant growth since its formation in 2017, expanding its portfolio from 20 casino properties to 93 experiential real estate assets leased to 13 tenants, indicating a strong trajectory in the real estate investment trust (REIT) sector [1]. Investment Strategy - The company has a diversified portfolio that includes real estate-backed loans with leading experiential operators, allowing it to increase its dividend yield of 5.3% annually since inception [2]. - Vici Properties has established strategic relationships with high-quality operators, which are crucial for its ongoing investment opportunities [3]. Recent Investments - In the previous year, Vici committed to investing $1.1 billion across three deals with an attractive initial yield of 8.1%, including partnerships with existing operators [4]. - The company formed a new partnership with Homefield, agreeing to provide up to $105 million for the development of a Margaritaville Resort, with rights to purchase properties in sale-leaseback transactions [4]. New Ventures - Vici Properties initiated a new strategic relationship with Cain International and Eldridge Industries, providing a $300 million mezzanine loan for the One Beverly Hills development, showcasing its focus on long-term partnerships [5][6]. - The REIT's growing list of partnerships, including a recent $432.9 million transaction with Lucky Strike, positions it for additional growth opportunities [6]. Notable Partnerships - The Venetian Resort was acquired for $4 billion in 2021, with a follow-on investment of up to $700 million for renovations, yielding a 7.25% return [7]. - The partnership with Great Wolf has expanded to include a $250 million mezzanine loan, with over $720 million committed to the company [7]. Broader Partnership Approach - Vici Properties aims to partner with operators of its properties, sharing in their success and creating new investment opportunities, which supports its strategy of increasing dividends and providing passive income [9].

Core Viewpoint - Vici Properties is a real estate investment trust (REIT) that specializes in owning casino properties, benefiting from the cyclical nature of the gaming industry while providing a stable income stream through its significant dividend yield [2][4][8]. Group 1: Business Model and Resilience - Vici Properties operates as a landlord rather than a casino operator, making its business model less cyclical compared to casino operations [4][7]. - The value of casino properties remains stable even during economic downturns, as evidenced during the COVID-19 pandemic when tenants continued to pay rent [6][5]. - The REIT's ability to increase dividends during challenging times demonstrates its financial resilience and commitment to returning cash to investors [9][6]. Group 2: Dividend Yield and Financial Strength - Vici Properties offers a dividend yield of 5.5%, significantly higher than the S&P 500 average of 1.2% and the average REIT yield of 3.8% [8]. - The company has consistently increased its dividend since it began paying one in 2018, indicating a strong focus on shareholder returns [9][10]. - Vici's balance sheet received an upgrade from Moody's, moving to investment grade, which will help reduce interest costs associated with its debt [11]. Group 3: Growth Potential - Vici Properties has a long-term growth strategy that includes diversifying its portfolio beyond gambling and providing loans for construction projects [14][15]. - The average lease term for Vici's properties is 40 years, with 90% of leases having automatic rent increases tied to inflation, ensuring steady income growth [15]. - Future acquisitions, whether in casinos or other assets, are expected to enhance growth potential, contributing to increased dividend payouts [15][14].

Core Viewpoint - Vici Properties is positioned as a resilient REIT, demonstrating stability and growth potential despite broader market challenges faced by the REIT sector due to rising interest rates [1][2][10] Group 1: Market Context - Many REITs faced difficulties in 2022 and 2023 due to increased interest rates, which raised acquisition costs and made dividends less attractive compared to risk-free investments [1] - The Federal Reserve's anticipated rate cuts in 2024 and 2025 may lead to a resurgence in REIT investments, particularly those with high yields [2] Group 2: Vici Properties' Business Model - Vici Properties operates a stable business model by owning casinos and entertainment properties, which allows it to consistently outperform the 10-Year Treasury yield of 4.4% [3] - The company has established long-term leases with major tenants like Caesars Entertainment and MGM Resorts, which are tied to the Consumer Price Index (CPI), ensuring rent increases with inflation [6][7] Group 3: Financial Performance - Vici has maintained a perfect occupancy rate of 100% since its IPO in 2018, with its Adjusted Funds From Operations (AFFO) per share increasing from $1.82 in 2021 to an expected $2.32-$2.35 in 2025 [8][9] - The company has consistently raised its dividends annually, with dividends per share increasing from $1.38 in 2021 to an expected $1.695 in 2024, indicating room for future increases [9] Group 4: Investment Appeal - Vici's stock is currently valued at $31, translating to a forward dividend yield of 5.5%, which is attractive for income-oriented investors [9] - The company is characterized as an "evergreen investment," suitable for those seeking consistent income during uncertain economic times [10]

Company Overview - VICI Properties is a unique REIT specializing in casino real estate, holding a dominant position in the sector due to key tenants like Caesars Palace and MGM Resorts, which provides it with a quasi-monopoly status [1]. Investment Criteria - The company is characterized by growth in revenue, earnings, and free cash flow, making it an attractive investment opportunity [1]. - VICI Properties has excellent growth prospects, which enhances its appeal to investors [1]. - The stock is noted for favorable valuations, which is a critical factor for potential investors [1]. Financial Characteristics - The company is preferred for its steadily growing revenue and high free cash flow margins, indicating strong financial health [1]. - VICI Properties is also recognized for its dividend stocks and generous share repurchase programs, which are attractive to income-focused investors [1].

Core Viewpoint - Vici Properties is a leading real estate investment trust (REIT) specializing in experiential real estate, particularly in the gaming and hospitality sectors, with a strong focus on generating stable rental income and increasing dividends for investors [1][3][9] Company Performance - In 2024, Vici Properties reported adjusted funds from operations (FFO) of $2.4 billion, or $2.26 per share, reflecting increases of 8.4% and 5.1% respectively, which enabled a 4.2% dividend increase, marking the seventh consecutive increase since its public listing in 2018 [3] - The company has achieved a peer-leading annual dividend growth rate of 7%, significantly higher than the 2.2% average of other net lease-focused REITs [3] Rental Income and Investments - Vici Properties benefits from rising rental income, with 40% of its leases linked to inflation, allowing it to capture higher rental increases amid elevated inflation [4] - The company announced $1.1 billion in new investments last year, with a weighted average initial yield of 8.1%, contributing to incremental income and future growth potential [4] Strategic Growth Initiatives - In 2025, Vici Properties established a strategic relationship with Cain and Eldridge Industries to explore unique experiential real estate investments, starting with a $300 million mezzanine loan for the development of One Beverly Hills [5][6] - The REIT is also collaborating with partners to identify additional investment opportunities and has committed over $720 million to Great Wolf Resorts across multiple transactions [6] Future Opportunities - Vici Properties has agreed to provide a construction loan of up to $105 million for a Margaritaville Resort in Kansas City, along with options to purchase related properties [8] - The company is set to invest up to $700 million in The Venetian Resort for extensive renovations, with rent adjustments reflecting the increased investment [8] Investment Outlook - Vici Properties has consistently provided a lucrative and steadily rising income stream since going public, positioning itself as an excellent long-term investment opportunity for those seeking passive income and potential price appreciation [9]

Core Viewpoint - Dividend stocks, particularly Vici Properties, are seen as low-risk investments with a strong historical performance, outperforming non-payers significantly over the decades [1]. Company Overview - Vici Properties is a real estate investment trust (REIT) focused on gaming and experiential properties, currently offering a dividend yield of 5.6% [2]. - The REIT owns a large portfolio of iconic casinos and experiential properties, including Caesars Palace and the Venetian Resort in Las Vegas, as well as bowling centers and sports facilities [3]. Financial Stability - Vici Properties operates under long-term triple net leases, providing stable rental income as tenants cover all operating costs [4]. - The REIT pays out approximately 75% of its stable cash flow in dividends, allowing for a cushion against tenant financial issues while retaining cash for new investments [5]. Dividend Growth - Vici Properties has consistently raised its dividend for seven consecutive years, achieving a compound annual growth rate of 7%, significantly higher than the average growth rate of 2.2% among similar REITs [6]. Growth Opportunities - The REIT has the right of first refusal to acquire several properties from Caesars and other tenants, indicating potential for future acquisitions [7]. - Vici Properties is also involved in funding the development of various experiential properties, creating an embedded acquisition pipeline [8]. - Recent strategic partnerships, such as the $300 million investment in One Beverly Hills, highlight the REIT's commitment to expanding its portfolio [9]. Future Investment Potential - The REIT identifies numerous future investment opportunities, including indoor waterparks, sports venues, and theme parks, which could further enhance its income sources [10]. - Vici Properties maintains a solid investment-grade balance sheet, providing liquidity for new investments that support dividend growth [11]. Long-term Outlook - Vici Properties is expected to continue its trend of increasing dividends, contributing to long-term wealth growth for investors [12].

Financial Data and Key Metrics Changes - AFFO per share for Q4 2024 was $0.57, an increase of 3.6% compared to $0.55 for Q4 2023 [33] - For the full year 2024, AFFO per share was $2.26, an increase of 5.1% compared to $2.15 for 2023 [33] - The company achieved a net debt to annualized fourth quarter adjusted EBITDA of approximately 5.3 times, within the target leverage range of 5 to 5.5 times [32] Business Line Data and Key Metrics Changes - The company committed approximately $1.1 billion of capital in 2024 at an initial yield of 8.1% [19] - Significant investments were made in the Venetian, with up to $700 million committed through a partner property growth fund strategy [20] Market Data and Key Metrics Changes - Las Vegas tourism hit records in 2024, with 58 million airline passengers and visitation increasing 2% year-over-year to approximately 42 million [22] - Operators in Las Vegas announced nearly $1 billion of investment in real estate since Q4 2024, reflecting a strong conviction in high-quality experiences [24] Company Strategy and Development Direction - The company initiated a strategic relationship with Cain International and Eldridge Industries, focusing on experiential investments [9][14] - The partnership aims to identify and pursue differentiated place-based experiences, enhancing the company's growth strategy [10][16] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 did not present a plentiful flow of high-quality real estate acquisition opportunities, but there were compelling development opportunities [40] - The company expects a busy start to 2025, with a wide funnel of potential investments in experiential and casino gaming spaces [44] Other Important Information - The company received an investment-grade credit rating from S&P, Fitch, and Moody's, enhancing access to capital [29] - The company has approximately $3.3 billion in total liquidity, including $525 million in cash and $2.4 billion available under its revolving credit facility [32] Q&A Session Summary Question: What does deal flow look like in 2024 compared to prior years? - Management indicated that 2024 did not see many high-quality real estate acquisition opportunities, but there were compelling development opportunities available [40][41] Question: Any comments on cash yields for various asset categories? - Management noted limited visibility on cash yields for high-quality assets on the strip due to recent trading activity and market volatility [47][50] Question: How does development funding compare to acquisitions? - Management expressed confidence in the return of capital from development funding, emphasizing the potential for ongoing partnerships with Cain and Eldridge [55][56] Question: Update on the licensing process in New York? - Management acknowledged progress in the New York licensing process but noted uncertainty regarding the outcome for the MGM property [115][116] Question: Insights on the competitive landscape for capital providers? - Management highlighted a cultural union with Cain and Eldridge, which positions the company favorably as a partner of choice for experiential investments [79]

Core Insights - VICI Properties reported fourth-quarter adjusted funds from operations (AFFO) per share of 57 cents, consistent with the Zacks Consensus Estimate, and a 3.6% increase from the prior-year quarter [1][3] - The company generated total revenues of $976.1 million, surpassing the Zacks Consensus Estimate by 0.1%, and reflecting a year-over-year increase of 4.7% [3] - VICI Properties expects AFFO per share in the range of $2.32-$2.35 for 2025, with the current Zacks Consensus Estimate at $2.31, which is below the projected range [7] Revenue Breakdown - Income from sales-type leases was $524.7 million, a 3.6% increase year-over-year [4] - Income from lease financing receivables, loans, and securities reached $420.7 million, rising 6% year-over-year [4] - Other income in the fourth quarter was $19.5 million, up 6.5% from the previous year, while golf revenues increased by 5.7% to $11.2 million [4] Financial Position - As of December 31, 2024, VICI Properties had cash and cash equivalents of $524.6 million, up from $355.7 million as of September 30, 2024 [5] - The company's total liquidity amounted to $3.3 billion, which includes cash, estimated net proceeds from forward sale agreements, and availability under its revolving credit facility [5] - Total debt remained unchanged at approximately $17.1 billion as of December 31, 2024 [6] Performance Comparison - Host Hotels & Resorts, Inc. reported fourth-quarter AFFO per share of 44 cents, exceeding the Zacks Consensus Estimate of 40 cents, with no change from the prior-year quarter [8] - Healthpeak Properties, Inc. reported fourth-quarter adjusted FFO per share of 46 cents, beating the Zacks Consensus Estimate by a penny, with results reflecting better-than-anticipated revenues [10][11]