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High-Yielding VICI Properties Makes A Big Splash With Multi-Billion Acquisition

Mar. 08, 2021 8:00 AM ETVICI Properties Inc. (VICI)APO, LVS20 Comments


  • VICI is a high-quality REIT with attractive fundamentals.
  • The REIT performed very well in 2020, despite the pandemic.
  • We like the Venetian acquisition and management's aptitude in finding ways to create value for shareholders.
  • This idea was discussed in more depth with members of my private investing community, Cash Flow Kingdom. Learn More »

Article Thesis

VICI Properties (NYSE:VICI) is a solid REIT that is surprisingly resilient to the current crisis and that offers a sizeable dividend yield to its owners. We liked the company in the past, and despite solid gains since we first covered the stock, shares are not overly expensive. The recently-announced acquisition of the Venetian showcases that management is able to deploy capital in a profitable way and the acquisition also strengthens VICI's position as a premier player in Las Vegas real estate.

photo of game machines

Source: unsplash.com

VICI Has Been Surprisingly Resilient In 2020

The pandemic has hit many industries hard, and travel and entertainment belong to the sectors that felt one of the largest impacts in 2020. Nevertheless, VICI's results remained quite solid in 2020, despite the fact that its real estate portfolio is centered around travel and entertainment assets.

The following slide from the company's Q4 earnings release showcases the underlying strength of the company's results in these unprecedented times:

Source: VICI presentation

VICI Properties continued to collect 100% of rent in cash, even during the pandemic, which wasn't expected by many during the peak of the crisis. After all, VICI's shares dropped by well above 50% peak-to-trough in 2020, as investors feared that the crisis would have a large impact on rent collection. The actual results, however, show that VICI's tenants remained in a position that didn't prevent them from making rent payments, despite hits to their businesses. VICI, as the provider of the assets, didn't feel a similar hit, which proves the excellent resilience of the company's business model.

VICI also was able to grow its business considerably, as revenues, its enterprise value, and EBITDA grew at a strong clip versus 2019. This does, however, include the impact of VICI's acquisitions, which are partially financed through the issuance of new shares. This is not necessarily accretive

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Is This an Income Stream Which Induces Fear?

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This article was written by

Jonathan Weber profile picture
Leader of Cash Flow Club
The Investment Community where your "Cash Flow is King"
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If you want to reach out, you can send a direct message here on Seeking Alpha, or an email to jonathandavidweber@gmail.com.


I work together with Darren McCammon on his Marketplace Service Cash Flow Club.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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