VICI Properties: Raised AFFO Guidance Implies Robust Dividend Hike Ahead

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VICI has already generated robust FQ2'24 performance metrics while raising their FY2024 guidance, with it implying a potentially rich dividend hike in FQ3'24.With the REIT already generating H1'24 ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nVICI Properties: Raised AFFO Guidance Implies Robust Dividend Hike Ahead\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-01 21:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4718407-vici-properties-raised-affo-guidance-implies-robust-dividend-hike-ahead><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>VICI has already generated robust FQ2'24 performance metrics while raising their FY2024 guidance, with it implying a potentially rich dividend hike in FQ3'24.With the REIT already generating H1'24 ...</p>\n\n<a href=\"https://seekingalpha.com/article/4718407-vici-properties-raised-affo-guidance-implies-robust-dividend-hike-ahead\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://seekingalpha.com/article/4718407-vici-properties-raised-affo-guidance-implies-robust-dividend-hike-ahead","article_id":"2464097244","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1158571591/image_1158571591.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2464097244","pubTimestamp":1725195600,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"VICI has already generated robust FQ2'24 performance metrics while raising their FY2024 guidance, with it implying a potentially rich dividend hike in FQ3'24.With the REIT already generating H1'24 AFF","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","VICI":"Vici Properties","BK4234":"特殊用途房地产信托","BK4084":"特种房地产投资信托","GLPI":"Gaming and Leisure Properties I","CFA.SI":"NikkoAM-STC Asia REIT","BK4561":"索罗斯持仓","BK4585":"ETF&股票定投概念"},"translate_title":"VICI Properties：提高AFFO指引意味着未来股息将大幅上涨","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VICI":1,"GLPI":1,"US2Y.BOND":0.9,"US7Y.BOND":0.9,"US6M.BOND":0.9,"US5Y.BOND":0.9,"US3Y.BOND":0.9,"US30Y.BOND":0.9,"US12M.BOND":0.9,"US10Y.BOND":0.9,"CFA.SI":0.9,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6},"content_text":"VICI has already generated robust FQ2'24 performance metrics while raising their FY2024 guidance, with it implying a potentially rich dividend hike in FQ3'24.With the REIT already generating H1'24 AFFO growth at +6.6% YoY, we believe that the management's guidance is on the prudent side, with another beat and raise performance very likely.VICI has diversified its concentration risks to non-gaming sectors as well, with it exemplifying the management's confidence of generating profitable growth ahead.Even so, with the stock seemingly fully valued and its investment thesis tied to its rich yields as the Fed (speculatively) pivots by September 2024, readers may want to wait for a moderate pullback.Patient investors may be rewarded with richer dividend yields and improved margin of safety.   Richard Drury The REIT Investment Thesis Has Played Out As Expected, Thanks To The Upcoming Fed Pivot We previously covered VICI Properties Inc. (NYSE:VICI) in June 2024, discussing why it remained a gift after the pullback, thanks to the REIT's increasingly rich yields, robust profitability, and healthier balance sheet. With its investments still generating a promising blended rate profitability despite the elevated interest rate environment, we believed that VICI remained a compelling Buy, significantly aided by the overall portfolio's extremely long remaining lease term. VICI YTD Stock Price TradingView Since then, VICI has already offered a total return of +20.3%, well outperforming the wider market at +5.7%. Even so, we are reiterating our Buy rating for long-term shareholders, with the caveat of waiting for a moderate pullback and/ or subscribing to a DRIP program to regularly accumulate additional shares on a quarterly basis. With the Fed expected to pivot in the upcoming September 2024 FOMC meeting, it is unsurprising that sentiments surrounding REITs along with other rich dividend yielding stocks have improved dramatically, especially since the US Treasury Yields have moderated to between 3.70% and 5.11%.   The lifting market sentiment is also attributed to VICI's double beat FQ2'24 earnings call, with the robust performance metrics and top/ bottom lines lending strength to its dividend investment thesis. This is despite the REIT operating in a relatively speculative gaming sector, one currently dominated by only two names, Gaming and Leisure Properties, Inc. (GLPI) and VICI included. Perhaps part of the tailwinds may be attributed to VICI's ongoing diversification beyond gaming/ casinos on the Las Vegas Strip, which currently comprises 48% of its FQ2'24 revenues - along with two core tenants, MGM commanding 38% of its lease revenues and Caesars at 36%. Despite so, readers must not discount the REIT's stellar execution thus far, since it continues to report 100% rental collection despite the challenging past few years - with 50% of its rents already set for CPI-linked escalator in 2024 and up to ~96% by 2035. On the other hand, VICI has also been diversifying its sector concentration risks with other experiential sectors, including:  Bowlero (bowling alley), Cabot (citrus farm), Canyon Ranch (wellness resort), Chelsea Piers (sports and entertainment complex), Great Wolf Resorts (resort with waterpark), Homefield (youth sports training facility and baseball center), and Kalahari Resorts (indoor waterpark resort).  While VICI has yet to break down its annualized rental revenues according to its tenants or sectors, it is apparent that the management is increasingly confident about its ability to generate profitable growth through the new tenant group. Despite the elevated interest rate environment, the REIT has demonstrated its robust investment grade rating at Credit Rating of BBB-, as observed in its ability to secure new loan originations at favorable rates while generating profitable spreads. The same has been observed in the $365M in the YTD real estate debt origination activity (non-gaming), compared to the $700M announced for the Venetian Capital Investment - with it underscoring the management ability to generate new growth opportunities beyond gaming. As a result, it is unsurprising that VICI has already raised their FY2024 AFFO guidance to $2.36B at the midpoint (+7.2% YoY) and AFFO per share to $2.25 at the midpoint (+4.6% YoY), with it potentially triggering a higher than expected dividend raise in the upcoming earnings call. Historically, the REIT has been reporting AFFO payout ratio of 77.2% in FY2023, higher than the sector median of 74% - based on the FY2023 AFFO per share of $2.15 and the dividend per share of $1.66. With VICI raising their FY2024 guidance, we believe that the next dividend raise may be at least to $1.73 per share (+4.2% YoY), if not more, based on the same payout ratio while building upon the 6Y CAGR of +6.3%. These projections are not overly aggressive as well, since the REIT has been generating robust H1'24 AFFO per share of $1.13 (+6.6% YoY), with the raised guidance seemingly on the prudent side. Assuming so, this strategy allows VICI to achieve another beat and raise performance in the upcoming earnings call - enabling the management to match its historical dividend raise of over +6% on a normalized basis at approximately $1.76. VICI Valuations Seeking Alpha This performance is highly promising indeed, explaining why the market has moderately upgraded VICI's FWD Price AFFO valuations to 14.65x, up from the 12.76x observed in the last article while nearing its 5Y mean of 14.54x. The upgrade is not overly ambitious as well, since the same has been observed in its gaming REIT peer, GLPI at FWD Price/ AFFO valuations at 13.83x (up from the 1Y mean of 12.33x). This is especially since VICI is expected to generate a stable top/ bottom line expansion at a CAGR of +4.2%/ +4% through FY2026, compared to GLPI at +5.7%/ +3.2%, respectively - implying that they are reasonably valued at current levels. This is especially when the former's forward estimates appear to be on the lower side at +4%, probably attributed to the management's prudent guidance thus far - with a further raise to over +6% likely, depending on its H2'24 performance.  So, Is VICI Stock A Buy, Sell, Or Hold?  VICI 4Y Stock Price TradingView For now, VICI has already charted a near vertical recovery since early July 2024, coincidentally when the market rotation from high growth stocks occurred, with the REIT stock also running away from its 50/ 100/ 200 day moving averages. For context, we had offered a fair value estimate of $31.30 in our last article, based on the management's previous FY2024 AFFO per share guidance of $2.235 at the midpoint (+3.9% YoY) and the FWD Price/ AFFO valuations of 14x. Based on VICI's raised FY2024 AFFO per share guidance of $2.25 (+4.6% YoY) and the market's raised FWD Price/ AFFO valuations of 14.65x (near to its 5Y mean of 14.54x), it is apparent that the stock continues to trade near to our updated fair value estimates of $32.90. Despite the massive rally, the REIT continues to offer a relatively rich forward dividend yield of 4.96% at the time of writing and potentially up to 5.25%, based on the upcoming dividend raise and the stock price of $33.48 at the time of writing - well exceeding its 4Y average of 4.9% and the sector median of 4.17%. This is also why we are cautiously reiterating our Buy rating for the VICI stock for dividend investors looking to DRIP, since most of its upside potential is already baked in - based on the recent rally by +20.3% from the July 2024 bottom. Otherwise, interested investors may want to wait for a moderate retracement before adding, as the wider market increasingly enters greed territory and the McClellan Volume Summation Index retests the April 2024 tops of 1,690x (compared to neutral at 1,000x) - with a moderate pullback likely in the near-term.  Patience may be more prudent for now, with the correction triggering an improved margin of safety and richer yields.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.26.4","shortVersion":"4.26.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2464097244"}