The House Always Wins

Some people treat investing like gambling.

They buy and sell options contracts or use leverage to juice their returns.

Sometimes it works out, but most of the time they lose everything.

Dividend investing is the opposite of gambling.

Sure, it’s still the stock market, so there’s always some risk.

But we’re looking for stable companies making great dividend payments.

And Gaming & Leisure Properties, Inc. (ticker: GLPI) fits the bill.

Gaming & Leisure Properties is a real estate investment trust (REIT), which is very popular with dividend investors.

REITs own properties and rent them out to individuals, businesses, and organizations.

Specifically, Gaming & Leisure Properties owns 71 casino properties across 21 states.

Gaming & Leisure Properties receives rental income from the casinos operating in its properties.

REITs are required by law to pay out at least 90% of their taxable income in dividends, so REITs have high dividend yields.

And Gaming & Leisure Properties is no exception with its 7% dividend yield.

However, it’s more than just a high dividend yield.

Gaming & Leisure Properties also has pretty good dividend growth for a REIT.

Over the past decade, it has averaged almost 3.5% dividend growth each year.

The growth isn’t earth-shattering, but it’s outpacing inflation.

Two things stand out concerning its dividend history.

Historically, Gaming & Leisure Properties paid out special dividends a few times, most recently in 2022.

These payments were made because of property sales or the need to reach the 90% threshold.

Second, Gaming & Leisure Properties cut its dividend in 2020, which makes sense because of COVID.

The REIT was very concerned about the pandemic impacting casinos, so it cut the dividend by 15%.

However, dividend increases started right up again a year later.

And Gaming & Leisure Properties is raising its dividend again by another 5%.

You need to own shares by June 11 (Thursday) to get the higher payment.

Even without the dividend, Gaming & Leisure Properties is a great company.

Its price-to-funds-from-operations (P/FFO), which is the preferred valuation ratio for REITs, is only 11x and lower than other REITs.

Plus, management expects adjusted FFO to grow another 5% next year, which will provide more income for higher dividend payments going forward.

If you still need convincing, then consider Gaming & Leisure Properties’ 100% occupancy rate.

Not a single one of its properties is empty!

So if you’re looking for a stable dividend stock with a high yield, make sure to give Gaming & Leisure Properties a look.

What are some of your favorite REITs?

Michael Jennings

This post originally appeared at Dividend Stocks Research.

Category: Dividend Stocks, Real Estate