This Sleepy Casino REIT Is an Income Lover's Dream

In the hunt for equity income, galore investors crook to real property dividend stocks. Just look astatine the Vanguard Real Estate Index Fund ETF. The largest exchange-traded money (ETF) successful the class yields 3.66%, oregon much than triple the output connected the S&P 500.

With immoderate homework, investors tin boost their existent property equity income propositions. Gaming and Leisure Properties (NASDAQ: GLPI) confirms arsenic much. This REIT, which yields an awesome 6.59%, isn't a casino stock successful the accepted sense, but it counts immoderate of the astir recognizable gaming operators among its tenants.

Experienced REIT investors whitethorn beryllium acquainted with Vici Properties, Gaming and Leisure's much salient rival. They're benignant of similar the Coca-Cola and PepsiCo of casino REITs, but their operating models differ, and those differences could spell accidental for GLPI.

A safer casino bet

Importantly, investors don't person to agelong excessively acold into the past to find sources of allure with this gaming REIT. The institution reported first-quarter results past week, and not lone did its adjusted funds from operations (AFFO) somewhat bushed Wall Street estimates, but the REIT besides raised its 2026 guidance.

Yes, AFFO is among the laundry database of investing acronyms marketplace participants request to know. Still, successful elemental terms, it's a captious gauge of a REIT's fiscal health, including its quality to prolong and turn dividends. One mode of looking astatine Gaming and Leisure's accrued AFFO guidance is that the aforementioned 6.59% dividend output isn't a output trap, and the payout summation streak that presently spans 5 years has the imaginable to grow.

Regarding dividend safety, this gaming REIT concluded the archetypal 4th with liquidity of $2.4 billion, including $275 cardinal successful cash, and with spending improbable to transcend $850 cardinal this year, the spot proprietor astir apt won't beryllium heading to superior markets to instrumentality connected much debt.

Second, Penn Entertainment (NASDAQ: PENN), the institution from which Gaming and Leisure was spun retired astir 13 years agone and the REIT's largest tenant, posted its ain acceptable of beardown first-quarter results. In fact, it was Penn's brick-and-mortar casinos successful the Midwest, South, and West, the spot assets of which are owned by GLPI, that were the superior sources of strength. Translation: The REIT's biggest tenant tin screen its rent obligations.