From The Motley Fool · Matt DiLallo · · 1m 10s
Why VICI Properties Stock Lags Despite Strong Earnings
VICI Properties stock remains under pressure after strong earnings due to Caesars Entertainment risks.
In brief
VICI Properties stock remains under pressure after strong earnings due to Caesars Entertainment risks. VICI Properties stock hasn't rebounded after strong earnings because of rising credit losses from Caesars Entertainment lease risks. Originally reported by The Motley Fool.
VICI Properties Earnings Overview
VICI Properties reported higher rental revenue and adjusted funds from operations with a ninth consecutive dividend increase.
Strong Third-Quarter Results
Total revenues rose 5.8% to $1.1 billion while adjusted funds from operations increased 4.3% to $0.62 per share.
Dividend and Valuation
The REIT increased its dividend by 2.2% to $0.46 per share with a 7.5% yield and 74% payout ratio.
Credit Loss Concerns
VICI reported a $458 million increase in expected credit losses due to Caesars Entertainment lease risks.
Caesars Financial Risks
Caesars accounts for 38% of VICI's rental revenue with $11.7 billion debt and a credit rating downgrade.
Stock Performance
VICI's stock sits more than 20% below its 52-week high with a valuation under 10 times AFFO.
Investment Outlook
VICI could deliver double-digit annual returns with modest AFFO growth but faces significant downside risk from Caesars.
The big picture
VICI Properties stock hasn't rebounded after strong earnings because of rising credit losses from Caesars Entertainment lease risks.
