Gaming & Leisure Properties (Nasdaq: GLPI) is an actual property funding belief (REIT) that owns properties leased to gaming operators. It has 59 properties in 18 states, together with Tropicana Las Vegas, Boomtown New Orleans, and Laborious Rock Resort & On line casino in Biloxi, Mississippi.
It presently pays a $0.72 per share quarterly dividend, which comes out to a yield of 5.8%. The corporate can also be paying an extra $0.25 per share particular dividend this week.
Can traders count on to proceed to obtain the dividend? Or are they extra like red-eyed gamblers, feeding the slot machine at 5 a.m. and hoping it would pay out?
Since Gaming & Leisure Properties is a REIT, we measure its money move by funds from operations, or FFO.
The corporate’s FFO has been steadily rising for a number of years.
You might be shocked to see that FFO even climbed in 2020 when all the pieces was shut down because of the pandemic. However keep in mind, Gaming & Leisure Properties doesn’t function the casinos.
It doesn’t e book lodge rooms, water down free drinks or ensure that nobody is counting playing cards. It merely collects the hire. And if Caesars Leisure, Bally’s and Boyd Gaming needed to verify their casinos had been going to rake within the money as quickly as folks returned after the pandemic, they needed to proceed to pay their hire.
However, the corporate did decrease its dividend within the second quarter of 2020 from $0.70 per share to $0.60. Previous to that, it had raised the dividend yearly, beginning when it first paid one in 2014, and it has now raised the dividend 5 instances since 2020.
The payout ratio on FFO in 2022 was 87%. Since REITs need to pay out 95% of their earnings in dividends, they usually pay most of their money move out as properly. Something beneath 100% is inside my consolation zone. This 12 months, the payout ratio is predicted to be the identical.
Traders gained’t have to be fortunate to proceed to obtain their dividend. The truth is, they’ll doubtless need to be fairly unfortunate – like a supplier pulling a six out of the deck when he hits on 16 – to not receives a commission.
Solely a world pandemic has to this point disrupted the corporate’s stable dividend historical past.
Dividend Security Ranking: B
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