Vici Properties (VICI -0.26%) and EPR Properties (EPR -0.59%) are the two leading experiential real estate investment trusts (REITs). These niche REITs may both focus on owning and leasing specialized properties across the country, but they have very different business models, with unique risks and growth opportunities.

Let's take a closer look at each company to determine which is the better buy of the two today.

1. Businesses

Vici Properties exclusively owns and leases gambling resorts and casinos -- 50 to be exact, including properties leased to some of the biggest names in the industry like Caesar's, MGM Resorts, and Hard Rock.

EPR Properties, on the other hand, owns a wide range of properties. In total, its portfolio consists of 363 properties including movie theaters, eat-and-play restaurants, ski lodges, amusement parks, museums, zoos, resorts, and gambling properties, along with several others. 

2. Opportunities and headwinds

EPR Properties' much larger and more diverse portfolio of assets means it benefits from multiple income streams. In the event one industry is struggling, (such as its theater properties today) the REIT has other properties in entirely different industries to offset its losses.

Vici Properties' niche portfolio makes the company more susceptible to negative changes within the gambling industry. If new laws are passed that hurt casino operations or demand for casinos and resorts slows, it has no other income to offset these losses. Being so focused on a single asset class also makes it more challenging to grow. After all, there are only so many casinos and resorts for Vici to own.

EPR Properties can acquire a slew of different assets, doubling down on high-growth industries while reducing its portfolio in underperforming industries. So when it comes to growth opportunities, EPR Properties definitely wins. However, the company is facing greater headwinds than Vici Properties today. 

EPR Properties' largest tenant industry is movie theaters. It owns roughly 172 theater properties, making up 41% of its annual base rents. Theaters have struggled since the onset of the pandemic, which hurt the REIT's tenants. Cineworld Group, the owner of the Regal theater brand, which leases 57 of EPR's properties, filed for Chapter 11 bankruptcy in 2022. 

Cineworld only missed one month's rent payment in 2022 and is was paying rent through February, but there's no guarantee these payments will continue. It's also not the only tenant or industry that has needed assistance in the form of rent deferrals over the past few years. While year-over-year growth is strong and headed in the right direction, the REIT's revenue, funds from operations, and net income have yet to return to pre-pandemic levels. 

Conversely, Vici Properties has collected 100% of its rents since its initial public offering in 2018, its portfolio is 100% occupied, and it's crushing its earnings

3. Dividend and pricing

EPR Properties has a dividend yield of 8.2% compared to Vici Properties' 3.6% yield. However, this yield is a reflection of the risks its carries. EPR Properties' dividend is well covered though, with a payout ratio of 65% while Vici Properties' payout is around 76%. The payout ratio is how much income -- in the case of REITs, funds from operations -- is devoted to paying dividends. Simply put, both stocks have stable dividends for the time being.

VICI Dividend Yield Chart

Data source: YCharts

Over the past five years, EPR Properties has cut its dividend by 23% while Vici Properties has raised its dividend by 144%. A dividend cut isn't that surprising considering how hard the pandemic was on EPR Properties, but dividend increases aren't a big part of its history. Since the REIT switched to monthly dividend payments in 2013, its has increased its dividend only 4%. At the same time, its share price has fallen by 35%, making it a losing stock over the long term. Vici Properties, on the other hand, has seen its share price rise 70% over the past five years.

The stocks are trading in the mid-to-low-$30 range right now, making them fairly equal in terms of price. However, the price doesn't indicate value.

EPR Properties failed to provide a full-year 2023 forecast, which isn't surprising in light of the troubles of Cineworld; however, based on its full-year 2022 earnings, it's trading at a super low valuation of about 7.5 times its adjusted funds from operation (AFFO). Vici Properties is trading at a good value, too, with a price-to-forward AFFO of 15. 

Which is the better buy?

I do believe EPR Properties could make a nice rally as experiential real estate recovers during the next 10 years. However, given the risks and headwinds the company is facing, I would say Vici is the better buy of the two right now despite its lower yield and higher pricing.

Vici Properties is performing well (up 10% during the past year), has a strong history of raising its dividends, and has stated it plans to expand its portfolio into other experiential properties to keep growing.