Weekly Issue #11
VICI Properties (VICI) — $23.76 at Friday’s close
VICI owns 103 properties, including the real estate under Caesars Palace, the Venetian, the MGM Grand and Mandalay Bay. Casino companies run them, and VICI collects the rent: $3.3 billion a year, on leases with 39.6 years left once renewals are counted. Under most of the leases the tenant also pays the property taxes, the insurance and the upkeep. The rent rises every year by at least 2%, and on the Caesars and Venetian leases, about half the rent, by inflation if that is higher.
At Friday’s close VICI cost 9.7 times the cash earnings it guides to for 2026 and 0.90 times its book value, and it pays $1.84 a share a year, a 7.7% yield. It has raised that dividend every year since it listed in 2018.
The shares are down 16% this year and 24% over twelve months. Two things stand out. The 10-year Treasury yield closed Friday at 5.00%, up from under 4% in February, and the Federal Reserve raised its rate on September 16. And Caesars, the tenant behind 38% of VICI’s rent, agreed in May to be bought by Fertitta Entertainment. I own VICI.
In 2020 the Strip’s gaming revenue fell 43%. VICI collected every dollar of its rent.
What it came through
Nevada’s casinos shut for weeks in the spring of 2020. Strip gaming revenue fell from $6.6 billion to $3.7 billion that year, then rose 90% in 2021. VICI told investors it collected 100% of its rent, in cash, on time. Its annual report says it did not defer or reduce rent for any tenant. It gave other relief: Caesars and Century got lower spending requirements, and JACK got one extra year before its rent increase began. Cash earnings per share rose from $1.48 in 2019 to $1.64 in 2020, and VICI raised its dividend 10.9% that September.
The leases are the reason: long terms and a guarantee from the tenant’s parent company. Today Caesars and MGM, which pay 70% of the rent, both guarantee what their operating companies owe. Caesars changed hands in 2020 as well, when Eldorado bought it, and VICI agreed new lease terms before that deal closed. No such agreement has been published this time.
VICI Properties (VICI) — $23.76 at the Oct 23 close, down 16% this year
| The check | Reading | Verdict |
|---|---|---|
| Price to AFFO | 9.7× | ✓ AFFO is a REIT’s cash earnings; VICI guides to $2.45 to $2.47 a share for 2026 |
| Price to book | 0.90× | ✓ Below book value |
| Dividend yield | 7.7% | ✓ $1.84 a share a year, 75% of AFFO |
| Rent collected in 2020 | 100% | ✓ The year Strip gaming revenue fell 43% |
| Net debt to EBITDA | 4.9× | ⚠ Debt less cash is about 4.9 years of operating cash profit; VICI targets 5.0 to 5.5×, and its ratings are the lowest investment-grade notch |
| Debt | 98% fixed | ✓ Average rate 4.45% at June 30; the 2026 notes were called for repayment in August; $1.5 billion due in 2027 |
| Latest dividend raise | +2.2% | ⚠ The smallest since the stock listed in 2018 |
| Largest tenant | 38% of rent | ⚠ Caesars is being bought; neither company publishes the rent cover on its regional lease |
Ratios from company filings and market data (see the VICI page on Travis Valuation →, which opens with a note on how to read a REIT and points to the same four measures used here: AFFO, the payout, book value and debt to EBITDA). Price ratios at the Oct 23 close. AFFO, adjusted funds from operations, is the measure VICI reports in place of net income; the multiple uses the midpoint of its 2026 guidance. Book value of $26.49 a share from the June 30 balance sheet; net debt of $16.9 billion from the same date. That page uses the annual report for the year ended December 31, 2025, so its book value and earnings ratios differ slightly from these.
What I can’t know
What happens to the Caesars regional lease. Those casinos pay VICI $731 million a year, 22% of its rent. Caesars’ shareholders approved the sale on September 22. The FTC asked for more information on September 14, gaming regulators still have to approve it, and no closing date has been published. VICI said on its July 30 call that it collects every dollar of rent in the meantime and that a conversation about the lease will come at some point as Caesars sets up its new ownership. A press report on an October 2 analyst note said VICI management described the cushion on that lease as thin. Neither company publishes the number.
What the rent steps look like. On November 1 the Caesars rent rises by 2% or inflation, whichever is higher, which by my arithmetic is $24 million a year at 2% and $36 million at 3%. The first reset that ties 20% of it to the casinos’ revenue comes on November 1, 2027.
Whether rates have peaked. VICI’s debt is 98% fixed, so higher rates do not raise its interest bill today. They raise the price of the next loan: in August it sold $900 million of notes at 5.40% and $850 million at 5.75% to repay debt that cost 4.25% and 4.5%, and $1.5 billion falls due in 2027.
Which tenant is behind part of a $271 million reserve increase. VICI’s second-quarter earnings were 48 cents a share, against cash earnings of 62 cents. The biggest item between them is a $271 million increase in a reserve for possible credit losses on its leases and loans, about 25 cents a share, partly offset by other non-cash items. No cash left the company, and no charge-off was taken. VICI says the increase came partly from two acquisitions it closed, partly from a weaker economic forecast, and partly because one tenant sold new debt with a lower credit rating. It does not say which tenant.
Skin in the game
I own VICI.
Buffett wrote in his 1989 letter to Berkshire shareholders: “Time is the friend of the wonderful business, the enemy of the mediocre.” A landlord whose leases run 39.6 years, counting renewals, has time on its side, as long as its tenants can keep paying. No insider has bought or sold VICI shares on the open market in the past twelve months.
Which account?
VICI pays $1.84 a share a year, a 7.7% yield, and as a US real estate trust almost all of it is ordinary income to you: 97% of the 2025 payout was. It does not get the Canadian dividend tax credit. US withholding is 15% under the Canada-US treaty, about 28 cents a share, if your broker has the usual form on file. It does not apply inside an RRSP. In a non-registered account you can claim it back as a foreign tax credit, though the income is taxed at your full rate. In a TFSA it is lost. At this yield the RRSP is the cleanest home. General information, not tax advice.
The workfile
Everything above is the short version. The workfile has VICI’s rent roll tenant by tenant, each lease’s term and escalator, the debt due year by year, the 2020 record, the dividend and cash earnings since 2018, and what I checked and could not confirm. It’s in this week’s workfile →
Your turn 👇
Which stock should we run through the checks next? Hit reply with a ticker.
Send me your pick →Curtis Travis is a retired AACI appraiser (B.Comm) and founder of Travis Valuation. He owns shares of VICI Properties, the subject of this issue, and of Lennar, Amazon, Walmart, Costco, TD, Scotiabank, Dick’s, Berkshire Hathaway and OMAB, all named in past issues. Prices, ratios, cash earnings, rent and debt are as of the Oct 23, 2026 close or the latest filing, from market data and VICI’s own SEC filings, not figures the Travis Valuation app carries. Strip gaming revenue is from the Nevada Gaming Control Board. The Caesars sale terms are from Caesars’ SEC filings. Prices move. Informational only — not a recommendation, and not tax advice. Do your own diligence.