VICI Says Dividend, Las Vegas Growth are High Priorities
Posted on: June 4, 2025, 07:06h.
Last updated on: June 5, 2025, 09:52h.
- Casino landlord says Strip development is its biggest opportunity
- REIT also wants to continue boosting dividend
VICI Properties (NYSE: VICI), the largest owner of casino real estate, sees significant value in its Las Vegas Strip footprint and wants to continue growing its dividend over time.
Executives from the real estate investment trust (REIT) made comments to that effect at the Nareit REITweek conference in New York on Wednesday. Through a series of acquisitions, including the $17.2 billion purchase of MGM Growth Properties in 2022, VICI is the largest owner of Strip gaming property, controlling 1.7 miles of the Strip’s four miles of frontage. That makes the US casino hub integral to VICI’s long-term investment thesis.
Over the next 10, 20, 30, 40 years, development of that frontage represents the most significant opportunity for VICI,” said CEO Ed Pitoniak at the conference.
In Las Vegas and beyond, VICI isn’t solely focused on gaming real estate. The REIT has broadened its reach into other experiential properties and Pitoniak noted at the Nareit event that the company could examine owning properties associated with youth sports. With a fast-growing population, the Las Vegas Valley could be an ideal place for VICI to become a player in the sports real estate space.
VICI Dividend Growth in Focus
Pitoniak also mentioned that adjusted funds from operations (AFFO) and dividend growth are top priorities for the Venetian owner.
Under federal tax law, REITs are required to pay out about 90% of earnings in the form of dividends to shareholders to gain the tax advantages associated with the REIT status. The asset class’s reputation for above-average payouts is one of the primary investors flock to it.
On a trailing 12-month basis, VICI yields 5.18%, making it attractive relative to even some of the highest-yielding US government debt and the stock has been an impressive dividend growth story. Since being spun out of Caesars Entertainment (NASDAQ: CZR) in 2017, VICI boosted its dividend nearly 10 times. Speaking of treasuries, Pitoniak noted the recent day on which 10-year yields move 13 basis points was “friggin’ scary.”
“We are in the cost of capital business. When you don’t know what the cost is, it’s really hard to price,” he said at the Nareit conference.
VICI Balance Sheet a Priority, Too
Regarding the cost of capital, the stronger a company’s balance sheet, the more likely it is to enjoy higher credit ratings and thus lower financing costs. Last November, Moody’s Investors Service boosted its rating on VICI, meaning the Caesars Palace owner has investment-grade ratings at all three major ratings agencies.
REITs typically carry large amounts of debt and that’s true of VICI, but it’s mitigated some of that exposure with floating rate bonds, spreading maturities out, and tending to its debt ratios.
“We’ve worked hard to get the balance sheet to give us the optionality to weather all storms,” said CFO David Kieske.
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