Vici Properties

Methodology

This EPS-based method has fundamental limitations for VICI Properties as a gaming REIT, since depreciation distorts reported earnings despite stable cash flows from triple-net lease agreements with casino operators. Investors should use FFO (Funds From Operations) or AFFO (Adjusted FFO) per share-based models instead of P/E ratios, as these metrics add back depreciation to reflect the economic reality of real estate ownership. The Peter Lynch framework is not appropriate for REIT valuation without significant modifications.

Methodology

Traditional PEG analysis is problematic for VICI given GAAP depreciation distortions that make EPS growth unreliable for measuring true business performance in gaming real estate. If using PEG, investors must substitute FFO or AFFO growth for EPS growth, and even then should compare the result to FFO multiples of other net lease REITs rather than treating it as a traditional PEG ratio. Price-to-FFO relative to rent escalation trends provides more reliable valuation signals for triple-net lease REITs than EPS-based PEG.

Methodology

While VICI pays a substantial dividend as required by REIT tax status, PEGY calculations using GAAP earnings remain misleading due to depreciation distortions that understate true profitability. Investors should evaluate dividend sustainability by examining FFO and AFFO payout ratios rather than relying on EPS-based PEGY. For gaming REITs like VICI, dividend yield combined with FFO growth and tenant credit quality provides better total return analysis than traditional PEGY frameworks.