5 Reasons to Add VICI Properties to Your Portfolio Right Now

VICI Properties VICI has well-diversified properties located across urban, destination and drive-to markets in 26 states of the United States and one Canadian province.

Analysts seem bullish on this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for VICI’s 2025 FFO per share has moved two cents northward over the past two months to $2.33.

In the past three months, shares of this company have gained 6.8% compared with the industry's growth of 0.8%.

Factors That Make VICI Properties a Solid Pick

Robust Portfolio Supports Reliable Income: VICI Properties is a triple net lease REIT that owns one of the largest high-quality portfolios of market-leading gaming, hospitality, wellness, entertainment and leisure destinations. The company's 100% occupancy rate reflects the mission-critical nature of its properties to their tenants, who cannot easily relocate without significant cost and regulatory approval. These factors provide VICI with consistent, reliable income and a dominant position in a lucrative market.

Favorable Long-Term Leases: VICI Properties’ long-term triple-net lease agreements with its tenants ensure a consistent revenue stream accompanied by inherent growth potential. As of Dec. 31, 2024, the company’s properties were 100% leased, with a weighted average lease term, including extension options, of approximately 40.7 years. Moreover, VICI Properties expects lease agreements to feature a rent roll of 42%, with CPI-linked escalation in 2025, which is further projected to rise to 90% by 2035. This structure ensures the company’s cash flow growth alongside inflation, offering stability even in challenging economic conditions.

Portfolio Diversification: VICI Properties has diversified its portfolio beyond gaming, which includes investments into other non-gaming experiential assets like Chelsea Piers and Bowlero. This strategic move reduces risk from gaming-specific volatility while positioning VICI as a leader in the broader experiential real estate market. Its ability to execute growth strategies effectively demonstrates strong management and positions the company for sustained success.

Balance Sheet Strength: VICI Properties focuses on enjoying financial flexibility, and as of Dec. 31, 2024, the company’s liquidity totaled $3.25 billion. The last quarter’s annualized net leverage ratio was 5.3 as of Dec. 31, 2024, with the long-term net leverage target being within 5.0-5.5.

VICI Properties enjoyed investment-grade credit ratings of ‘Baa3,’ ‘BBB-,‘ and ‘BB-‘ from Moody’s, S&P Global Ratings and Fitch Ratings, respectively, as of the end of the fourth quarter of 2024, rendering it favorable access to the debt market.

Encouraging Dividend Distributions: Solid dividend payouts remain the biggest attraction for REIT investors, and VICI Properties has remained committed to that. With a 7% annual dividend growth rate since 2018, it outpaces many peers in the triple-net REIT sector. Moreover, VICI Properties has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 8.05%. Given a robust operating platform and decent financial position, its dividend distribution is expected to be sustainable over the long run.

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Cousins Properties CUZ and Welltower WELL, each carrying a Zacks Rank of #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for CUZ 2025 FFO per share is pegged at $2.79, which indicates year-over-year growth of 3.7%.

The Zacks Consensus Estimate for WELL’s full-year FFO per share is $4.95, which indicates an increase of 14.6% from the year-ago period.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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