Why VICI Properties Is a Contrarian Buy Despite Las Vegas Tourism Woes

In an era where Las Vegas tourism faces headwinds—driven by shifting consumer preferences, economic uncertainty, and the lingering effects of pandemic-era spending patterns—VICI Properties Inc. (VICI) stands out as a rare contrarian opportunity. While critics point to the sector’s struggles, the company’s dividend resilience, structural advantages, and asset-level strength position it as a compelling long-term play. For investors willing to look beyond short-term noise, VICI offers a blueprint for how real estate and gaming can coexist in a post-pandemic world.

Dividend Resilience: A 5.13% Yield Anchored by Conservative Leverage

VICI’s dividend yield of approximately 5.13%—calculated using its recent $0.45-per-share quarterly payout and a share price of $33.45—places it among the most attractive real estate investment trusts (REITs) in the market [4]. This yield, while slightly lower than some speculative alternatives, is underpinned by a payout ratio of 65.35%, which, while elevated, remains sustainable given the company’s conservative leverage profile and stable cash flows [3].

The company’s ability to raise its dividend in 2025—from $0.4325 to $0.45 per share—demonstrates management’s confidence in its financial model [5]. This increase, coupled with a 4.22% annualized dividend growth rate over the past 12 months [4], suggests a disciplined approach to shareholder returns. For income-focused investors, VICI’s yield is not a gamble but a calculated bet on its ability to weather macroeconomic volatility.

Structural Advantages: Credit Quality and Lease Terms as a Moat

VICI’s strength lies not just in its dividend but in its structural advantages over tenants. The company’s portfolio is leased to 79% S&P 500 tenants, including industry giants like Caesars Entertainment and Red Rock Resorts [4]. These operators benefit from long-term triple-net leases, which transfer property taxes, insurance, and maintenance costs to tenants, ensuring stable cash flows for VICI.

Moreover, VICI’s credit profile has improved markedly. Moody’s upgraded its rating to ‘Baa3’ in November 2024, reflecting its “strong balance sheet and geographically diverse portfolio” [2]. This investment-grade status, combined with a Martini Letter Rating of A3 (indicating a 0.042% one-year default probability) [4], provides a buffer against tenant-specific risks. Even if individual operators face short-term liquidity issues, the portfolio’s diversification and high tenant credit quality mitigate systemic exposure.

Asset-Level Strength: Resilience in a Downturn

VICI’s Q3 2025 revenue of $1 billion—a 4.6% year-over-year increase—underscores its asset-level resilience [1]. This growth, driven by occupancy rates near 99% and rising adjusted funds from operations (AFFO) of $2.36 per share [5], highlights the company’s ability to generate cash even in a softening market.

The company’s recent $510 million delayed draw term loan facility for the North Fork Mono Casino & Resort further illustrates its proactive approach to capital deployment [2]. By financing tenant development projects, VICI aligns its growth with the long-term success of its partners, creating a symbiotic relationship that benefits both parties.

Short-Term Risks and Long-Term Positioning

Critics will argue that Las Vegas tourism—a key driver for VICI’s Nevada-based assets—is in decline. While true, this risk is already priced into the stock. The broader gaming sector’s challenges, including reduced international visitors and competition from online gambling, are well known. However, VICI’s geographic diversification—spanning 26 properties across 10 states—reduces its reliance on any single market [4].

Furthermore, VICI’s raised 2025 AFFO guidance ($2.35–$2.37 per share) signals confidence in its ability to outperform sector trends [5]. For investors with a multi-year horizon, this guidance, combined with the company’s dividend growth trajectory, offers a compelling case for reinvestment.

Conclusion: A Contrarian Play on Stability

VICI Properties is not a high-growth stock, but it is a fortress. In a market where volatility reigns, its dividend resilience, structural advantages, and asset-level strength make it a rare combination of income and stability. For contrarian investors, the current environment—where Las Vegas tourism woes dominate headlines—presents an opportunity to buy into a company that thrives when others falter.

As the real estate and gaming sectors navigate uncertainty, VICI’s playbook of conservative leverage, high-credit tenants, and disciplined capital returns offers a roadmap for enduring success.

**Source:[1] Capital One Financial Estimates VICI Properties Q3 Earnings, [https://www.marketbeat.com/instant-alerts/q3-eps-estimates-for-vici-properties-increased-by-analyst-2025-08-29/][2] VICI Properties' Credit Rating Upgraded to Baa3 by Moody's, [https://finance.yahoo.com/news/vici-properties-credit-rating-upgraded-160800662.html][3] VICI Properties Inc. (VICI) Valuation Measures & Financial ..., [https://finance.yahoo.com/quote/VICI/key-statistics/][4] VICI Properties Inc. (VICI) Dividend Date & History, [https://www.koyfin.com/company/vici/dividends/][5] VICI Dividend Announcement $0.4500/Share 9/4/2025, [https://www.dividendinvestor.com/dividend-news/20250904/vici-properties-inc-nyse-vici-declared-a-dividend-of-$0.4500-per-share/]