VICI Properties: Undervalued Vegas Exposure and Resilient Dividend Amid Tourism Recovery

The real estate investment trust (REIT) sector has long been a haven for income-focused investors, but few names combine high-yield dividends with strategic exposure to high-growth markets like VICI Properties (NYSE: VICI). As the owner of iconic Las Vegas gaming and entertainment properties-including Caesars Palace, the MGM Grand, and the Venetian Resort-the company's fortunes are inextricably tied to the Strip's tourism recovery. With Q4 2025 approaching, the question is whether VICI's undervalued real estate exposure and resilient dividend make it a compelling buy for long-term investors.

Q4 2025 Traffic Outlook: Navigating Headwinds, Eyeing Recovery

VICI Properties has demonstrated remarkable resilience in Q3 2025 despite a challenging Las Vegas tourism environment. The company reported funds from operations (FFO) of $0.60 per share, exceeding analyst estimates, and generated $1.01 billion in revenue, according to a MarketBeat alert. While occupancy rates for Vegas hotels have declined-June 2025 saw a 14.9% year-over-year drop in occupancy, with July worsening to a 16.8% decline, according to a Travel Weekly report-management remains optimistic about a rebound. John Payne, VICI's president and COO, noted during the earnings call that operators anticipate improvement through Q4 2025 and into 2026, as reported by a Commercial Observer article.

The softness in summer 2025 has been attributed to reduced international travel, particularly from Canada, and capacity cuts by Spirit Airlines, as reported by the Commercial Observer. However, forward bookings for conventions and trade shows-key drivers of Las Vegas revenue-are robust. The Las Vegas Convention and Visitors Authority (LVCVA) has increased marketing spend by 30% to attract visitors, according to Travel Weekly, and VICI's diversified portfolio of 54 gaming properties and 39 experiential retail assets across the U.S. and Canada provides a buffer against localized downturns, as reported by the Commercial Observer.

Undervaluation: A Compelling Valuation Metric

VICI's current valuation metrics suggest it is undervalued relative to its peers. The stock trades at a price-to-earnings (P/E) ratio of 11.58, according to a MarketBeat alert, significantly below the average P/E for the REIT sector. This discount is partly due to near-term concerns about Vegas tourism but overlooks the company's strong fundamentals. For instance, VICI's adjusted funds from operations (AFFO) grew by 7.4% year-over-year in Q3 2025, as reported by the Commercial Observer, and its 25-year lease with Clairvest Group for the Northfield Park racino in Ohio, also reported by the Commercial Observer, underscores its ability to diversify revenue streams.

The company's portfolio is also uniquely positioned for long-term growth. With 74% of its rent roll secured by S&P 500 tenants and 40% of its leases indexed to inflation, as noted in a Nasdaq article, VICI's cash flows are insulated from macroeconomic volatility. Moreover, its net leverage ratio of 5.2 as of June 30, 2025, as reported in the Nasdaq article, remains within its target range of 5.0–5.5, ensuring financial flexibility for future investments.

Dividend Resilience: A 5.9% Yield with Room to Grow

VICI's dividend yield of 5.9%, according to a MarketBeat alert, is a standout feature in a low-yield environment. The company recently increased its quarterly dividend to $0.45 per share (annualized $1.80), a 4% hike that reflects confidence in its cash flow sustainability, as reported in a Nasdaq article. This growth is underpinned by a disciplined capital allocation strategy: VICI targets distributing 75% of its AFFO to shareholders, as reported in the Nasdaq article, balancing income generation with reinvestment in high-quality assets.

The dividend's resilience is further supported by the company's long-term lease structure. With an average lease duration of 40.1 years, as noted in the Nasdaq article, VICI's rental income is stable and predictable. Even in a downturn, its triple-net lease model-where tenants cover property taxes, insurance, and maintenance-reduces operational risks. This structure, combined with $3 billion in liquidity as of June 30, 2025, as reported in the Nasdaq article, positions VICI to maintain its payout even if Vegas occupancy rates remain soft through early 2026.

Conclusion: A Strategic Buy for Income and Growth

VICI Properties offers a rare combination of undervaluation and dividend resilience. While near-term challenges in Las Vegas tourism weigh on sentiment, the company's diversified portfolio, inflation-linked leases, and strong balance sheet provide a solid foundation for long-term growth. For investors seeking a high-yield REIT with exposure to a recovering market, VICI's current valuation and forward-looking guidance make it a compelling addition to a diversified portfolio.