VICI Properties
This is the top pick across Wall Street in the net lease group, and it is an ideal pick for investors who are more conservative and looking for gaming exposure. VICI Properties Inc. (NYSE: VICI) is a triple net lease REIT that was spun out of Caesars Entertainment post-bankruptcy.
The company has 23 mixed-use gaming, lodging and entertainment properties in its portfolio, and a subsidiary that owns four championship golf courses. VICI also owns roughly 34 acres of undeveloped land in Las Vegas, which it leases to Caesars.
Much of the focus has been on VICI’s recent deal to acquire the real estate of the Venetian Resort in Las Vegas, with Apollo as a new tenant. Looking ahead, many on Wall Street are very positive on VICI’s embedded growth pipeline with Caesars Entertainment, including a put/call on the Centaur properties in Indiana (starting in January) and a right of first refusal on a strip asset sale for Caesars, which could occur soon after a full earnings before interest, taxes, depreciation, amortization and restructuring or rent costs recovery.
In addition, the company recently closed a $17.2 billion deal to buy out rival gaming REIT MGM Growth Properties, which owns the real estate of 15 casinos and resorts in eight states, including seven properties on the Las Vegas Strip. All of MGM Growth’s properties are operated by MGM Resorts International.
Investors receive a 4.94% distribution. Goldman Sachs recently lifted its target price on VICI Properties from $35 to $39. The consensus target is $35.27. Monday’s closing share price was $29.17.
W.P. Carey
This is a large net lease REIT with an incredible distribution for income investors. W.P. Carey Inc. (NYSE: WPC) ranks among the largest net lease REITs, with an enterprise value of approximately $18 billion and a diversified portfolio of operationally critical commercial real estate that includes 1,215 net lease properties covering approximately 142 million square feet, as of September 30, 2020.
For nearly five decades, the company has invested in high-quality single-tenant industrial, warehouse, office and retail properties subject to long-term leases with built-in rent escalators. Its portfolio is located primarily in the United States and northern and western Europe, and it is well diversified by tenant, property type, geographic location and tenant industry.
Investors receive a 5.19% distribution. The price target on W.P. Carey stock at Raymond James is $90. The consensus target is $88.33., and shares closed Monday’s trading at $81.49.
Most of these top companies have been hit by the move higher in interest rates and the large-scale selling across Wall Street in every sector. These top stocks are all leaders in their specific REIT subsectors and offer multiple ways for investors to get steady growth and be paid substantial dependable income. Lastly, they have all been hit reasonably hard and are offering the best entry points in well over a year. It is important to remember that REIT distributions can contain return of principal.
Originally posted at 24/7 Wall St.
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