VICI Properties (NYSE: VICI), the largest casino landlord in the US, said today it is raising its quarterly to 39 cents a share, an 8.3% increase from current levels.
The move elevates the Caesar Palace owner’s annual payout to $1.56 a share from $1.44. The gaming real estate investment trust (REIT) yields 4.31%, or more than triple the dividend yield on the S&P 500 and well above the yield on 10-year Treasuries.
The dividend will be payable on October 6, 2022 to stockholders of record as of the close of business on September 22, 2022,” according to a statement issued by the New York-based company.
VICI made the announcement after the close of US markets today. The stock fell 0.24% Thursday. But it’s up 11% year-to-date, which easily outpaces the broader market, as well as the widely followed FTSE Nareit Equity REITS Index. The gauge is down 16.68% this year.
VICI Legacy of Dividend Growth
Investors often flock to REITs for the asset class’s above-average dividends and yields – traits VICI certainly obliges.
The real estate company was spun off from the old version of Caesars Entertainment in October 2017, and with today’s dividend news, its payout increase streak is now five years. A member of the S&P 500, VICI is the largest experiential landlord in the US and a dominant owner of prestigious Las Vegas Strip property assets.
Through a series of recent transactions, not only does the company own Caesars Palace, it also owns the Venetian and nearly all of the Strip venues operated by MGM Resorts International (NYSE:MGM). The exceptions are Bellagio and Cosmopolitan.
By way of the recently completed purchase of MGM Growth Properties, which wrapped up in late April, VICI added nearly 41,000 hotel rooms and 1.2 million square feet of gaming space.
VICI now owns the property 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.
VICI Dividend Sustainability
Experienced investors know that while a company raising its payout is usually a good thing, it’s more important that the firm has the resources to meet current payout obligations and continue growing the dividend over time.
VICI checks those boxes. By way of the aforementioned acquisitions and others, the REIT added multiple new streams of rental income. Importantly, the company’s contracts with tenants are long-term — often a decade or more — and feature inflation escalators. Alone, the MGP deal results in more than $1 billion in new rental income for VICI.
Additionally, VICI remains acquisitive, maintaining a knack for deals large and small. Last month, the company said it is buying the property assets of the Rocky Gap Casino Resort in Flinstone, Md. from Golden Entertainment (NASDAQ: GDEN) for $204 million.
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