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2 High-Yield Dividend Stocks That Just Raised Their Guidance
Key Points
VICI Properties raised its 2026 forecast and authorized a $2 billion buyback.
EPR Properties raised its guidance and now plans to invest more this year.
Both yield more than 6.5%, but each comes with specific risk factors that income investors should understand.
Real estate investment trusts (REITs) aren't known for generating much excitement during earnings season. They collect a predictable stream of rent, making their earnings easier for analysts to gauge than, say, AI chipmakers. That predictability is a big part of their appeal for income investors, and it's also why a guidance increase from a REIT is worth paying attention to.
With that in mind, two high-yield REITs, Vici Properties (NYSE:VICI) and EPR Properties (NYSE:EPR), recently reported third-quarter results, and both raised their full-year outlooks. Here's why I own both of these high-yield stocks, and why I plan to add even more shares to my portfolio over time.
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The casino landlord has been beaten down lately
Let's start with Vici Properties. The company owns casino and entertainment properties, including Caesars Palace and MGM Grand in Las Vegas, just to name a couple. It then leases them to operators under very long-term agreements with built-in rent increases. Its adjusted funds from operations (AFFO), which is a REIT's version of free cash flow, came in at $0.62 per share, up 4.3% from a year ago. And as mentioned earlier, full-year guidance for AFFO per share. What's more, the board authorized a new $2 billion share buyback.
It's tough to overstate how rare a large buyback is for a real estate investment trust. Typically, REITs use all of the cash flow they generate to pay dividends and invest in growth. A buyback is a REIT's management team saying that its own stock is the most attractive investment opportunity it can find.
Vici's quarterly dividend works out to a 7.4% yield at its share price as of this writing, and it uses about 74% of the AFFO management expects this year. That is generally considered a safe, if somewhat conservative, payout ratio for a REIT.
Of course, Vici isn't without risk. Tenant concentration is a big one. Caesars accounts for about 38% of its rent, and MGM Resorts (NYSE:MGM) is also a massive tenant. But this is an extremely solid real estate investment trust with a well-covered dividend, and management says shares trade at an attractive price. To put it mildly, I agree.
Investing in experiences
EPR owns what it refers to as experiential properties, such as movie theaters, eat-and-play venues (TopGolf is a major tenant), ski resorts, and other entertainment destinations. Its adjusted FFO rose 8.8% to $1.49 per share in the third quarter, and management raised the low end of its 2026 guidance to $5.49-$5.57 per share. The company also increased its investment spending forecast, which is impressive, given that the high-rate environment often makes it tougher to find acceptable investment opportunities.
EPR is a rare example of a stock that pays its dividend monthly, with an annualized yield of about 6.2%. Its payout ratio is only about 60% of AFFO (most REITs are in the 70%-80% range, such as Vici), leaving plenty of room for future increases.
To be sure, EPR has its own risk: movie theaters. Theaters still account for about 34% of its annualized base revenue, and the company is working to reduce that share and focus on its highest-value properties. To be sure, box office performance has been quite strong in recent years. But if theater attendance weakens, some of EPR's tenants could come under pressure.
Which one is right for you?
In a nutshell, these two REITs offer similar yields with different trade-offs. VICI's tenants are among the largest casino operators in the country, and its leases run for decades, but most of its rent comes from two companies. EPR's portfolio is more varied, its payout ratio is lower, and it pays every month, but its properties depend on consumer spending on experiences, which can be cyclical.
Having said all that, both reports gave income investors reasons for confidence rather than concern. I'm happy to keep collecting VICI's dividend, and EPR looks like a solid option for investors seeking monthly income and comfortable with its theater exposure.
Matt Frankel, CFP® has positions in EPR Properties and Vici Properties. The Motley Fool has positions in and recommends EPR Properties. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.