Casino landlord VICI Properties raises dividend by 6.4%.
VICI Properties (NYSE: VICI), the leading casino landlord in the United States, revealed on Thursday that it's boosting its quarterly dividend to 41.5 cents per share from the current 39 cents. This increase means the company's annual payout will climb by 6.4%, rising from $1.56 to $1.66 per share.
This news came a day after VICI finalized the purchase of the real estate belonging to a set of Canadian gaming venues. These venues will remain under the management of Colorado-based Century Casinos (NASDAQ: CNTY).
The dividend will be distributed to shareholders on October 5, 2023, to those who hold stock at the close of business on September 21, 2023, according to a statement released by the real estate investment trust (REIT).
Based in New York, VICI is a part of the S&P 500. With a diversified portfolio of 54 gaming locations across the United States and Canada, the REIT is currently home to some of the most well-known casinos in the world, including Caesars Palace and the Venetian.
Their shares closed today with a dividend yield of 5%, which is 74 basis points higher than the yield on 10-year Treasurys.
A Growth-Oriented Approach to Dividends
Dividends are always welcome, but this approach is best suited to long-term investments, so it's crucial for companies to consistently raise their payouts.
In line with this demand, VICI has stepped up to the challenge. This latest dividend boost from the owner of the Venetian came almost a year after an 8.4% increase and marks the sixth consecutive year of dividend hikes since the REIT's creation from Caesars Entertainment in 2017.
Through a series of savvy acquisitions, VICI has become the biggest player on the Las Vegas Strip. They hold the real estate assets for Caesars Palace and the Venetian as well as the property holdings for almost every venue on the Strip operated by MGM Resorts International (NYSE: MGM). MGM's Bellagio and Cosmopolitan are the only exceptions.
Spanning over 15 states, including Canada and Nevada, VICI's geographic diversity means that the Strip accounts for approximately 40% of their rental income.
Keeping Up with GLPI
With the latest dividend announcement, VICI keeps on par with its rival, Gaming and Leisure Properties (NASDAQ: GLPI), the only publicly traded gaming REIT.
On August 31, Gaming and Leisure made a second dividend increase this year, along with a previously planned special dividend. Gaming and Leisure's dividend yield is 104 basis points higher than VICI, but VICI's shares have been the stronger performer in 2023.
Despite sharing the same sector, there are notable distinctions between the two REITs. VICI's market capitalization is roughly two and a half times larger than its competitor, whereas Gaming and Leisure has significantly less exposure to the Las Vegas Strip.
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