VICI Properties: A High-Yield Dividend Play at a Discount to Peers

For income-focused investors, real estate investment trusts (REITs) remain a cornerstone of diversified portfolios, offering a blend of steady cash flows and capital appreciation. Among the sector’s standout performers, VICI Properties Inc. (VICI) emerges as a compelling value-driven opportunity. With a dividend yield of 5.37% as of September 4, 2025, and a valuation discount to peers, VICI combines the allure of high income with the resilience of a well-structured balance sheet.

A Dividend Powerhouse with Sustainable Growth

VICI’s latest quarterly dividend hike of 4%—raising its annualized payout to $1.80 per share—underscores its commitment to rewarding shareholders [1]. This follows a 6.6% compound annual growth rate (CAGR) in dividends since 2018, outpacing many triple-net REITs [3]. The yield itself is competitive: while peers like Realty Income (O) offer 5.5% and Park Hotels & Resorts (PK) boasts an 8.4% forward yield [4], VICI’s 5.37% sits comfortably within the high-yield spectrum.

The sustainability of this payout is reinforced by VICI’s operational strength. The company maintains a 100% occupancy rate across its 54 gaming and 39 experiential assets, a critical advantage in an industry where relocation of tenants is logistically and financially prohibitive [2]. Furthermore, 42% of its 2025 rent roll includes CPI-linked escalations, a figure projected to rise to 90% by 2035, insulating cash flows from inflationary pressures [2].

Valuation at a Discount, with Room to Run

VICI’s valuation metrics suggest it trades at a discount to its triple-net REIT peers. As of August 5, 2025, its price-to-FFO (funds from operations) ratio stood at 12.96, aligning with the sector average of 12.9X but offering a margin of safety given its stronger balance sheet [1]. By contrast, peers like NNN REIT trade at similar P/FFO multiples but with slightly lower occupancy rates (98% for NNN vs. 100% for VICI) [3].

The company’s net debt-to-EBITDA ratio of 5.1x—well within its target range of 5.0–5.5x—also outperforms the peer group average of 5.54x [1]. This disciplined leverage, combined with $3.21 billion in liquidity as of March 31, 2025, provides flexibility for strategic acquisitions and dividend growth [2]. Analysts note that VICI’s FFO coverage ratio of 1.44x, while slightly below the peer average of 1.49x, remains robust given its 74% weighting of S&P 500 tenants [4].

A Resilient Business Model in a Shifting Landscape

VICI’s portfolio of long-term triple-net leases (weighted average term of 40.7 years) and its focus on gaming and experiential assets create a unique moat. Unlike office REITs, which face occupancy declines due to remote work trends (average 86.3% in Q3 2024) [5], VICI’s tenants—such as Caesars Entertainment and Live Nation—benefit from inelastic demand. This structural advantage is reflected in its dividend payout ratio of ~75%, a level that balances growth with security [1].

The Case for Value-Driven Income Investors

For investors prioritizing yield and capital preservation, VICI’s combination of a high dividend, strong occupancy, and conservative leverage makes it an attractive play. While its P/FFO of 12.96 is in line with the sector, its superior occupancy and tenant quality suggest undervaluation. In a high-interest-rate environment, where REITs with fixed-rate debt and long-term leases thrive, VICI’s business model is particularly well-suited to outperform.

Critics may argue that its yield lags behind peers like Park Hotels, but such comparisons overlook VICI’s superior operational stability. With a 4.0% dividend hike in 2025 and a track record of outpacing sector growth, the company appears poised to deliver both income and appreciation for value-conscious investors.

Source:
[1] VICI Properties Inc. Increases Regular Quarterly Dividend, [https://investors.viciproperties.com/news/news-details/2025/VICI-Properties-Inc--Increases-Regular-Quarterly-Dividend/default.aspx]
[2] VICI Properties Rises 12.7% Year to Date: Should You Buy, [https://www.nasdaq.com/articles/vici-properties-rises-127-year-date-should-you-buy-or-sell]
[3] Earnings Update: Net Lease REITs (Q2 2025), [https://www.high-yield-landlord.com/p/earnings-update-net-lease-reits-q2-cc2]
[4] The State of REITs: June 2025 Edition, [https://www.2ndmarketcapital.com/2025/06/24/the-state-of-reits-june-2025-edition/]
[5] Office REITs: High Quality Properties Attract & Retain, [https://www.reit.com/news/articles/office-reits-high-quality-properties-attract--retain-tenants-outpace-peers]