VICI(VICI) ZACKS·2025-03-25 20:00Core Viewpoint - VICI Properties Inc. has demonstrated strong stock performance and growth potential, supported by strategic investments and a solid dividend history, making it an attractive option for dividend-focused investors [1][2][3]. Group 1: Financial Performance - VICI's stock has rallied 9.5% year-to-date, closing at 31.97, outperforming both the Zacks REIT and Equity Trust - Other industry and the S&P 500 [1]. - The company reported continued benefits from expansion efforts and strategic investments in its fourth-quarter and full-year 2024 results [2]. - VICI has increased its dividend five times in the last five years, with a five-year annualized dividend growth rate of 8.05% [3]. Group 2: Dividend and Income Stability - VICI Properties offers a compelling ~5.5% dividend yield, with a commitment to distributing 75% of its adjusted funds from operations (AFFO) to shareholders [7]. - The company has a diverse portfolio of 54 gaming and 39 experiential assets across North America, with a 100% occupancy rate and long-term triple-net leases averaging 40.7 years [9]. - For 2025, VICI expects 42% of its rent roll to have CPI-linked escalation, projected to rise to 90% by 2035, enhancing its revenue stability [10]. Group 3: Growth and Strategic Positioning - Since its founding in 2017, VICI has grown its adjusted EBITDA by 350%, diversifying beyond gaming properties to include experiential assets [11]. - The company has 3.3 billion in liquidity as of December 31, 2024, providing financial flexibility to navigate market fluctuations [11]. - VICI's properties are essential to its tenants, who face significant challenges if they relocate, reinforcing reliable rental income [9]. Group 4: Valuation and Market Position - VICI's stock is trading at a forward 12-month price-to-FFO ratio of 13.63X, below the REIT-Other industry average of 15.33X [18]. - The Zacks Consensus Estimate for 2025 adjusted funds from operations (AFFO) per share has seen a positive revision, indicating favorable market sentiment [14]. Group 5: Challenges and Considerations - Despite diversification efforts, gaming properties remain the primary revenue driver, exposing VICI to industry-specific risks [12]. - The company carries a significant debt load of approximately $17.1 billion as of December 31, 2024, which could impact its financial stability [13]. - VICI's performance is sensitive to interest rate movements, which can affect borrowing costs and the attractiveness of its dividend yield [13].