Shares of VICI Properties VICI have gained 10.3% in the year-to-date period, outperforming the industry’s growth of 3.5%.

This experiential real estate investment trust (REIT) has well-diversified properties located across urban, destination and drive-to markets in 26 states of the United States and one Canadian province.

Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 FFO per share has been revised 2 cents northward to $2.33 over the past month.

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Let us decipher the possible factors behind the surge in the stock price.

VICI Properties is a triple net lease REIT that owns one of the largest high-quality portfolios of market-leading gaming, hospitality, wellness, entertainment and leisure destinations. The company's 100% occupancy rate reflects the mission-critical nature of its properties to their tenants, who cannot easily relocate without significant cost and regulatory approval. These factors provide VICI with consistent, reliable income and a dominant position in a lucrative market.

VICI Properties’ long-term triple-net lease agreements with its tenants ensure a consistent revenue stream accompanied by inherent growth potential. As of Dec. 31, 2024, the company’s properties were 100% leased, with a weighted average lease term, including extension options, of approximately 40.7 years. Moreover, VICI Properties expects lease agreements to feature a rent roll of 42%, with CPI-linked escalation in 2025, which is further projected to rise to 90% by 2035. This structure ensures the company’s cash flow growth alongside inflation, offering stability even in challenging economic conditions.

VICI Properties has diversified its portfolio beyond gaming, which includes investments into other non-gaming experiential assets like Chelsea Piers and Bowlero. This strategic growth reduces risk from gaming-specific volatility while positioning VICI as a leader in the broader experiential real estate market. Its ability to execute growth strategies effectively demonstrates strong management and positions the company for sustained success.

VICI Properties focuses on enjoying financial flexibility, and as of Dec. 31, 2024, the company’s liquidity totaled $3.25 billion. The last quarter’s annualized net leverage ratio was 5.3 as of Dec. 31, 2024, with the long-term net leverage target being within 5.0-5.5. Moreover, VICI Properties enjoyed investment-grade credit ratings of ‘Baa3,’ ‘BBB-,‘ and ‘BBB-‘ from Moody’s, S&P Global Ratings and Fitch Ratings, respectively, as of the end of the fourth quarter of 2024, rendering it favorable access to the debt market.

Solid dividend payouts remain the biggest attraction for REIT investors, and VICI Properties has remained committed to that. With a 7% annual dividend growth rate since 2018, it outpaces many peers in the triple-net REIT sector. Moreover, VICI Properties has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 8.05%. Given a robust operating platform and decent financial position, its dividend distribution is expected to be sustainable over the long run.

With the above-mentioned factors, we believe the rising trend in the stock is expected to continue in the near term.

Key Risks for VICI

Tenant concentration risk and a substantial debt burden remain concerns for VICI Properties. Macroeconomic uncertainties and inflationary pressures are likely to affect operators’ business.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Welltower WELL and SL Green Realty SLG, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Welltower’s 2025 FFO per share is pegged at $4.89, which indicates year-over-year growth of 13.2%.

The Zacks Consensus Estimate for SL Green’s full-year FFO per share is $5.48, which indicates an increase of 9% from the year-ago period.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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