Investing Lawyer highlights bullish thesis on VICI Properties
With a 5.3% dividend yield and triple-net leases tied to inflation, the REIT offers stability, though hedge fund interest has slightly cooled and AI stocks remain the preferred short-term bet.
Investing Lawyer’s Substack has published a bullish investment thesis on VICI Properties Inc (VICI), identifying the company as a dominant landlord in the casino and leisure sector. The analysis highlights VICI’s $34 billion market capitalisation and its ownership of iconic assets, including Caesars Palace Las Vegas, MGM Grand, and The Venetian Resort Las Vegas. The investment case is underpinned by long-term triple-net lease agreements, with approximately 40% of the portfolio linked to inflation adjustments for built-in rent escalation.
As of 27 May, VICI shares traded at $28.63, reflecting trailing and forward price-to-earnings (P/E) ratios of 9.80 and 9.87, respectively. The company offers a 5.3% dividend yield, supported by six consecutive years of dividend growth. The annual dividend stands at $1.73, with a quarterly payout of $0.43 and a 65% payout ratio, providing a steady income stream for investors seeking defensive characteristics in the real estate investment trust sector.
Despite the positive outlook, the author notes that VICI is not among the 40 most popular stocks held by hedge funds. Data indicates that 51 hedge fund portfolios held the stock at the end of the first quarter, a slight decrease from the 52 portfolios that held it in the previous quarter. This suggests that while the fundamental case for the casino landlord is strong, institutional conviction has not reached the levels seen in other high-conviction plays.
The author also expressed a preference for artificial intelligence (AI) stocks over VICI for potentially higher returns in the short term. In a previous bullish thesis on STAG Industrial Inc (STAG) published in May 2025, the same author noted that STAG’s stock appreciated by approximately 15.71% since coverage. The comparison underscores a strategic tilt towards technology sectors for faster capital appreciation, even as VICI offers long-term durability and inflation protection.
VICI’s revenue model relies on tenants covering property taxes, insurance, and maintenance, allowing the REIT to collect highly stable rental income with minimal operating costs. The analysis argues that the REIT sector backdrop is undervalued, enhancing the re-rating potential for high-quality assets like VICI. With strong contractual cash flows and structural demand for premier entertainment real estate, the company presents a compelling case for income stability and long-term capital appreciation.
