VICI Properties (NYSE:VICI) - Share price, News & Analysis

Q: What is the Fair Price of VICI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

VICI ($34.82) is trading below our estimate of [[fair value]] ($76.81)

VICI fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	2/6
Financial Health	2/6
Dividends	3/6

VICI Stock Overview

Rewards

Trading at 54.7% below our estimate of its fair value

Earnings are forecast to grow 29.26% per year

Risk Analysis

Interest payments are not well covered by earnings

Shareholders have been substantially diluted in the past year

Dividend of 4.14% is not well covered by earnings

Profit margins (33.8%) are lower than last year (85.9%)

VICI Properties Competitors

Weyerhaeuser

NYSE:WY

US$27.0b

Digital Realty Trust

NYSE:DLR

US$37.9b

Extra Space Storage

NYSE:EXR

US$29.1b

SBA Communications

NasdaqGS:SBAC

US$37.1b

Price History & Performance

Summary of all time highs, changes and price drops for VICI Properties
Historical stock prices
Current Share Price	US$34.82
52 Week High	US$35.05
52 Week Low	US$26.23
Beta	1.02
1 Month Change	10.47%
3 Month Change	21.20%
1 Year Change	15.22%
3 Year Change	69.28%
5 Year Change	n/a
Change since IPO	88.22%

Recent News & Updates

Aug 11

VICI Properties: What To Do Following This Bull Run

VICI had outstanding business growth during the most recent quarter. On a per-share basis, results were less intriguing, although still solid. VICI has become pricey and is now trading at a premium compared to the historic norm. Shares have risen by a lot this year, which is why they aren't a buy any longer. Some investors may want to consider locking in gains. Article Thesis VICI Properties (VICI) is a quality REIT that has performed well throughout the pandemic and that has made a range of major deals in the recent past, including the MGM Growth Properties acquisition that closed during Q2. The company's results for the second quarter were very solid as well, but the company has now become somewhat pricey, following a strong year-to-date performance. Some investors may want to consider locking in gains, e.g. by using an options strategy called covered call writing. VICI Continues To Deliver Solid Results During its fiscal second quarter, VICI Properties performed well. The company generated revenue of $660 million, which was up by a massive 76% year over year, and which beat the consensus estimate by more than 10%. It should be noted that this growth was driven by acquisitions to a large degree -- underlying/comparable growth was weaker. When VICI Properties makes acquisitions, these are generally either financed via debt or via the issuance of new shares. In the case of acquisitions being financed by debt, interest expenses for the company climb, which is why additional revenue or gross profit does not flow through to the bottom line completely. In the case of acquisitions being financed by the issuance of new shares, company-wide profits are distributed over a larger number of outstanding shares, which is why earnings per share are growing at a slower pace compared to VICI Properties' overall net profit. Management knows this and only makes deals where profits on a per-share basis have a high chance of rising despite these headwinds, but investors naturally can't expect earnings per share or FFO per share growth at a similar level to the company's outstanding revenue growth rate in an acquisition-heavy quarter. In Q2, the company managed to grow its funds from operations per share by 3.7% year over year, as a 68% company-wide FFO increase was mostly offset by a big increase in VICI Properties' share count. FFO per share growth of around 4% is far from bad, especially for an income vehicle such as a REIT that offers a solid 4%+ dividend yield. But a 4% FFO per share growth rate also isn't too exciting, at least relative to the way higher company-wide revenue and profit growth rate. Looking toward the second half of the year, VICI Properties' management believes that performance will be solid and relatively on par with what we have seen during the most recent quarter. The company guides towards funds from operations of $1.67 billion, which equates to funds from operations of around $1.90 on a per-share basis. The company generated adjusted funds from operations per share of $1.82 during 2021, thus the current guidance implies a growth rate of around 4% -- again, that's pretty solid for a REIT or income stock in general, but it's not extraordinary. VICI's Longer-Term Outlook Is Healthy, But Valuation Has Run Up VICI is an absolute leader in the gaming real estate space and benefits from scale and cost of capital advantages versus smaller peers. VICI Properties is well-positioned to continue to consolidate the space, by making either larger takeovers such as the recent MGM Growth Properties deal or by making tuck-in acquisitions of smaller assets. I do believe that M&A will be a positive factor for the company's future growth, although it's hard to prognosticate how many deals, and at what size, the company will make over the next couple of years. Organic growth is another driving force for higher FFO in the coming years. VICI Properties has locked in rent increases via the contracts it has with its tenants. A large portion of those contracts is CPI-linked, although unfortunately oftentimes with a cap in place. The MGM Grand/Mandalay Bay rents, for example, are CPI-linked with a cap of 3.0%. While those caps seemed irrelevant a couple of years ago when inflation was running in the 2% range, they are a disadvantage now -- CPI is running with a 9% handle, but VICI Properties only gets a 3% rent increase due to the cap it agreed to when crafting a contract for this property. Organic rent growth will thus likely be somewhat subdued, relative to inflation, in the foreseeable future, although VICI Properties still will benefit from rising rents that should lift its funds from operations, all else equal. Between M&A and some organic growth, VICI will continue to deliver reliable revenue and FFO growth, I believe. Analysts are currently predicting that the FFO per share growth rate will be in the 15% range next year, and around 4% in the year after. When we include this year's forecasted FFO growth, that comes out to an average 7% annual growth rate, which is quite attractive. It remains to be seen whether next year's increase will really be as large as expected. The capturing of synergies following the MGM Growth Properties acquisition could allow for an above-average growth rate for sure, but actual growth may still be below the 15% level. Overall, I do believe that VICI has a very solid growth outlook and that investors can expect reliable performance from this strong management team that has been executing well throughout the pandemic. But not every company with a solid outlook is necessarily a buy all of the time. Valuation has to be considered as well, and VICI has become somewhat pricey in recent months. While I was pretty bullish on VICI earlier this year, as shown in this article from March, I'm less bullish now -- the company has offered a total return of 30% in those five months, whereas the market has pulled back by 8% over the same time, which means that VICI has outperformed the broad market by around 40% since that article was published. Naturally, I'm less bullish now, following this outsized gain relative to the broad market. VICI's valuation has also climbed considerably in that time frame: VICI EV to EBITDA (Forward) data by YCharts While VICI Properties traded at a below-average valuation earlier this year, shares have now climbed to an above-average valuation. Today, VICI Properties is trading with an enterprise value to EBITDA multiple of around 21. That's 15%-20% higher than the longer-term median EV/EBITDA multiple. In other words, VICI is trading on the expensive side, relative to the company's history. An EV/EBITDA multiple above 20 also is pricey in absolute terms, I believe. Naturally, I think it's best to buy when valuations are low in absolute terms and relative to historical trading patterns. That's not the case today, as we can easily see above, although it was the case at the beginning of the year. With shares trading at a premium relative to what the company's trading history shows, some investors may want to think about locking in gains.

Jul 11

VICI Properties: Wait For Shares To Drop Below $30

VICI is a large casino REIT, with a large portfolio with several trophy properties in Las Vegas along with numerous regional casinos. VICI has bounced around between the high-20 and low-30 range for most of 2022. I will be looking to buy below $30 per share. Shares currently trade at 17.1x price/FFO with a dividend yield of 4.6%. If the pattern holds, we should see a dividend hike with the next quarterly dividend in the fall. Over the last couple of years, I have switched my investment strategy from mainly buying fast-growing tech companies to looking for dividend growth opportunities. While the first half of 2022 has been a rough stretch for investors, I know for a fact that I would be feeling much more pain if I hadn’t been buying income-focused investments for most of 2021 and 2022. One of these income investments that made its way onto my radar in the last year is VICI Properties (VICI). VICI is a large casino REIT with a portfolio dominated by well-known Las Vegas casinos. This article will be an update on my coverage earlier this year in January. Investment Thesis VICI is a unique REIT on the public markets. The company owns many well-known trophy assets on the Las Vegas strip, as well as regional properties around the US. Investors should be aware of tenant concentration, as Caesars (CZR) and MGM (MGM) make up nearly 80% of the rent roll. Shares are trading at or near fair value right now, with a price/FFO multiple of 17.1x. For investors looking to start a long position, I would be patient and look for a dip below $30 per share. Either way, investors can collect a 4.6% dividend that is set to grow for years to come. A Brief Overview Of VICI Most triple net REITs own properties that many of us visit on a weekly basis, from grocery stores to restaurants. VICI is playing a whole different ballgame and has bought up a good chunk of the Las Vegas strip. Since my last article, VICI closed the MGM Properties acquisition, adding to an already large portfolio of casinos. VICI Rent Roll (VICI Properties) As you can see, VICI’s tenants are a who’s who list of the large operators of casino properties in the US. The portfolio is made up of approximately 45% Vegas properties and 55% regional assets. Caesars and MGM dominate the portfolio, with nearly 80% of rent coming from those two tenants. Investors should be aware of the tenant concentration, but VICI has a dominant presence in Las Vegas between those two groups and the Venetian, which is another 10% of rent. Viva Las Vegas (VICI Properties) Digging a little deeper on VICI’s Las Vegas footprint shows several things. They say a picture is worth 1,000 words, and it certainly applies here when it comes to VICI’s dominance on the Las Vegas strip. If you have spent any time in a major casino in Vegas, you have probably spent time (and money) at one or more of VICI’s properties. On top of all the trophy assets, they also have some land on the strip that is prime real estate. You can get all of this at a decent valuation, but I think patient investors might be able to buy shares at a slightly cheaper price than you can get them today. Valuation Shares of VICI have spent most of the year bouncing around in between the high-20 and low-30 range. With shares above $31, the price/FFO is currently 17.1x, which is slightly above the 16.4x average multiple of the last couple of years. I think it is possible that we see multiple expansion over the longer term, but I’m not a buyer right now at current prices. Price/FFO (FAST Graphs) I think it’s entirely possible that shares head towards a 20x FFO multiple, but with market weakness in the short term, I think there could be a better entry point in the next couple of months. While the FFO multiple doesn’t show much undervaluation right now, investors in VICI have experienced solid dividend growth over the last couple of years. An Incoming Dividend Hike

Shareholder Returns

	VICI	US REITs	US Market
7D	2.4%	2.9%	1.3%
1Y	15.2%	-4.6%	-11.7%

Return vs Industry: VICI exceeded the US REITs industry which returned -4.3% over the past year.

Return vs Market: VICI exceeded the US Market which returned -11.6% over the past year.

Price Volatility

Is VICI's price volatile compared to industry and market?
VICI volatility
VICI Average Weekly Movement	4.0%
REITs Industry Average Movement	4.3%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: VICI is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: VICI's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2016	129	Ed Pitoniak	https://www.viciproperties.com

VICI Properties is an experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality and entertainment destinations, including the world-renowned Caesars Palace. VICI Properties’ national, geographically diverse portfolio consists of 29 gaming facilities comprising over 48 million square feet and features approximately 19,200 hotel rooms and more than 200 restaurants, bars and nightclubs. Its properties are leased to industry leading gaming and hospitality operators, including Caesars Entertainment, Inc., Century Casinos Inc., Hard Rock International, JACK Entertainment and Penn National Gaming, Inc. VICI Properties also owns four championship golf courses and 34 acres of undeveloped land adjacent to the Las Vegas Strip.

VICI Properties Fundamentals Summary

How do VICI Properties's earnings and revenue compare to its market cap?
VICI fundamental statistics
Market Cap	US$33.53b
Earnings (TTM)	US$626.02m
Revenue (TTM)	US$1.85b

53.6x

P/E Ratio

18.1x

P/S Ratio

Is VICI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
VICI income statement (TTM)
Revenue	US$1.85b
Cost of Revenue	US$40.48m
Gross Profit	US$1.81b
Other Expenses	US$1.19b
Earnings	US$626.02m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.65
Gross Margin	97.82%
Net Profit Margin	33.78%
Debt/Equity Ratio	62.0%

How did VICI perform over the long term?

See historical performance and comparison

Dividends

4.1%

Current Dividend Yield

142%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is VICI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for VICI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for VICI. This is calculated by dividing VICI's market cap by their current preferred multiple.
What is VICI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$33.53b

VICI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	25.8x
Enterprise Value/EBITDA	43.9x
PEG Ratio	1.8x

Price to Earnings Ratio vs Peers

How does VICI's PE Ratio compare to its peers?

VICI PE Ratio vs Peers

The above table shows the PE ratio for VICI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	43.8x
WY Weyerhaeuser	11x	-44.1%	US$27.0b
DLR Digital Realty Trust	28.6x	13.6%	US$37.9b
EXR Extra Space Storage	31.2x	6.2%	US$29.1b
SBAC SBA Communications	104.4x	12.5%	US$37.1b
VICI VICI Properties	53.6x	29.3%	US$33.5b

Price-To-Earnings vs Peers: VICI is expensive based on its Price-To-Earnings Ratio (53.6x) compared to the peer average (43.8x).

Price to Earnings Ratio vs Industry

How does VICI's PE Ratio compare vs other companies in the US REITs Industry?

Price-To-Earnings vs Industry: VICI is expensive based on its Price-To-Earnings Ratio (53.6x) compared to the US REITs industry average (31.8x)

Price to Earnings Ratio vs Fair Ratio

What is VICI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

VICI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	53.6x
Fair PE Ratio	62.5x

Price-To-Earnings vs Fair Ratio: VICI is good value based on its Price-To-Earnings Ratio (53.6x) compared to the estimated Fair Price-To-Earnings Ratio (62.5x).

Share Price vs Fair Value

What is the Fair Price of VICI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: VICI ($34.82) is trading below our estimate of fair value ($76.81)

Significantly Below Fair Value: VICI is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is VICI Properties forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

29.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: VICI's forecast earnings growth (29.3% per year) is above the savings rate (1.9%).

Earnings vs Market: VICI's earnings (29.3% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: VICI's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: VICI's revenue (11.4% per year) is forecast to grow faster than the US market (8% per year).

High Growth Revenue: VICI's revenue (11.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: VICI's Return on Equity is forecast to be low in 3 years time (12.5%).

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Past Performance

How has VICI Properties performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

35.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VICI has high quality earnings.

Growing Profit Margin: VICI's current net profit margins (33.8%) are lower than last year (85.9%).

Past Earnings Growth Analysis

Earnings Trend: VICI's earnings have grown significantly by 35.7% per year over the past 5 years.

Accelerating Growth: VICI's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VICI had negative earnings growth (-50.2%) over the past year, making it difficult to compare to the REITs industry average (47.9%).

Return on Equity

High ROE: VICI's Return on Equity (2.9%) is considered low.

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Financial Health

How is VICI Properties's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: VICI's short term assets ($35.0B) exceed its short term liabilities ($557.7M).

Long Term Liabilities: VICI's short term assets ($35.0B) exceed its long term liabilities ($14.6B).

Debt to Equity History and Analysis

Debt Level: VICI's net debt to equity ratio (59.3%) is considered high.

Reducing Debt: Insufficient data to determine if VICI's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: VICI's debt is not well covered by operating cash flow (10.5%).

Interest Coverage: VICI's interest payments on its debt are not well covered by EBIT (2.5x coverage).

Balance Sheet

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Dividend

What is VICI Properties's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

4.14%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: VICI's dividend (4.14%) is higher than the bottom 25% of dividend payers in the US market (1.5%).

High Dividend: VICI's dividend (4.14%) is in the top 25% of dividend payers in the US market (4.05%)

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, VICI has been paying a dividend for less than 10 years.

Growing Dividend: VICI's dividend payments have increased, but the company has only paid a dividend for 4 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (142.2%), VICI's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (96.5%), VICI's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.2yrs

Average management tenure

CEO

Ed Pitoniak (66 yo)

4.83yrs

Tenure

US$7,662,894

Compensation

Mr. Edward Baltazar Pitoniak, also known as Ed, has been the Chief Executive Officer and a Director of VICI Properties Inc. since October 6, 2017. Mr. Pitoniak served as Vice Chairman of Realterm, a privat...

CEO Compensation Analysis

Compensation vs Market: Ed's total compensation ($USD7.66M) is below average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Ed's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: VICI's management team is considered experienced (4.2 years average tenure).

Board Members

Experienced Board: VICI's board of directors are considered experienced (4.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 79.3%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/11 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31