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Dividend stocks offer a valuable opportunity for generating passive income, appealing to many investors seeking reliable revenue streams. Companies with strong financials often provide substantial dividends, allowing investors to reap benefits from their investment capital.
VICI Properties (VICI 1.61%) has emerged as an attractive option for income-focused investors. This article explores the number of shares one would have to accumulate to earn $5,000 in annual dividend income from this real estate investment trust (REIT).
VICI Properties boasts a diverse portfolio of coveted experiential properties, which prominently includes three renowned casinos on the Las Vegas Strip: Caesars Palace, MGM Grand, and the Venetian Resort. The REIT leases these establishments under long-term triple net (NNN) agreements, ensuring consistent and escalating rental income to support its dividend distributions.
Currently, VICI Properties rewards its shareholders with a quarterly dividend of $0.4325 per share, amounting to an annualized dividend of $1.73. To achieve an annual income of $5,000 from dividends, an investor would need to own approximately 2,890 shares. Given its recent share price around $32.50, this would require an investment exceeding $94,000.
While the initial investment may seem daunting, it is essentially comparable to the capital typically needed to purchase a rental property, factoring in closing costs, down payments, and potential repairs. Moreover, investors would begin receiving passive dividend payments almost immediately.
In contrast, accumulating a similar annual dividend income through an S&P 500 index fund would demand a much larger financial commitment. Due to the lower 1.4% dividend yield of the S&P 500 compared to VICI’s 5.3%, an investment of over $350,000 in the index fund would be necessary to generate the same $5,000 in annual dividends.
VICI Properties also presents a compelling case for income growth, as it has consistently raised its dividends every year since its inception, marking seven years of uninterrupted increases. Impressively, its dividend has expanded at a compound annual growth rate of 7%. This potent combination of high yield and growth potential positions VICI Properties as an appealing selection for dividend investors seeking to enhance their passive income strategies.
Source
www.fool.com