VICI Properties (NYSE: VICI) The share price has plummeted in recent months, falling more than 15% from its recent high. This has lowered its share price to $25, while raising its dividend yield to more than 6%, well above the S&P 500average (1.2%).
That high performance passive income Stream could be your ticket to financial freedom.
VICI Properties owns a growing portfolio of experiential real estate (e.g., casinos, bowling entertainment centers, and sports and entertainment complexes). It leases these properties to operating companies on a long-term triple net basis (NNN) leases. Those rental agreements provide you with ever-increasing cash flows as a growing percentage increase rents with inflation (46% this year, rising to 90% in 2035). The real estate investment trust (REITs) pays out about 75% of its stable cash flow in dividends, retaining the rest to reinvest in experiential real estate that generates additional income.
The REIT buys properties in sale-lease transactions (recently secured a $1.2 billion deal to acquire seven gaming properties), invests in real estate-backed loans and provides financing to existing tenants to improve their properties. Along with rental growth, these new investments help increase VICI’s cash flow to support its dividend.
The company has increased its dividend to eight years in a row (every year since its formation). It has grown its payout at a compound annual rate of 6.6% over that period, much faster than the 2.3% average of other REITs focused on investing in NNN real estate over that period.
With a huge total addressable market opportunity (over $400 billion for US gaming properties alone) and partnerships with many of the top experiential companies, VICI Properties has a lot of growth ahead of it. This should allow it to continue increasing its dividend. As a result, investors should collect steadily increasing passive income, which is the ticket to financial freedom.
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