Investing in dividend stocks is a great way to make a lot of passive income each year. Many high-quality companies pay high-yielding dividends, enabling you to generate more passive income from every dollar you invest.
VICI Properties (VICI +0.18%) has been a great income investment over the years. Here's a look at how many shares of the real estate investment trust (REIT) you'd need to own to collect $5,000 in dividend income each year.
NYSE: VICI
Key Data Points
VICI Properties owns a treasure trove of experiential real estate, including three of the most iconic casinos on the Las Vegas Strip: Caesars Palace Las Vegas, MGM Grand, and Venetian Resort Las Vegas. The REIT leases these properties to operating companies under very long-term triple net (NNN) leases. Those leases provide it with very stable and growing rental income to pay dividends.
The REIT currently pays a quarterly dividend of $0.4325 per share ($1.73 annualized). At that rate, you'd need to own 2,890 shares to collect $5,000 in dividend income each year. With its share price recently around $32.50, you'd need to invest over $94,000 into the REIT to hit that annual income level.
While that's a lot of money, it's about what you'd need to buy a rental property, given the closing costs, down payment, and repairs required to purchase a home and get it ready to rent. Further, you'd start collecting very passive dividend income immediately.
Meanwhile, it's much less money than you'd need to invest in an S&P 500 index fund to generate the same level of annual dividend income. Given the S&P 500's lower dividend yield (1.4% versus 5.3% for VICI Properties), you'd need to invest over $350,000 into an S&P 500 index fund to reach $5,000 in annual dividend income.
VICI Properties' dividend income should rise each year. The REIT has increased its payout every year since its formation (seven consecutive years), growing it at a 7% compound annual rate. Its combination of yield and growth makes it a great dividend stock to buy for passive income.
