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 Arduous Rock Lodge & On line casino in Biloxi, Mississippi.
It at the moment pays a $0.72 per share quarterly dividend, which comes out to a yield of 5.8%. The corporate can be paying a further $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 can pay out?
Since Gaming & Leisure Properties is a REIT, we measure its money movement by taking a look at 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 every part 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 be certain nobody is counting playing cards. It merely collects the lease. And if Caesars Leisure, Bally’s and Boyd Gaming wished to ensure 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 lease.
Nonetheless, 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 occasions since 2020.
The payout ratio on FFO in 2022 was 87%. Since REITs should pay out 95% of their income in dividends, they typically pay most of their money movement out as effectively. Something beneath 100% is inside my consolation zone. This 12 months, the payout ratio is anticipated to be the identical.
Buyers gained’t should be fortunate to proceed to obtain their dividend. In truth, they’ll doubtless should be fairly unfortunate – like a seller pulling a six out of the deck when he hits on 16 – to not receives a commission.
Solely a world pandemic has thus far disrupted the corporate’s strong dividend historical past.
Dividend Security Ranking: B
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