VICI Properties (VICI) recently completed a public offering of $1.75b in senior unsecured notes, with proceeds earmarked to repay part of its senior notes maturing in 2026 and drawing investor attention to the stock.

At a share price of $26.36, VICI Properties has seen its share price drift lower in recent months, with a 30 day share price return of 1.90% down and a 1 year total shareholder return of 13.64% down, which suggests recent refinancing news is being weighed against a longer period of more modest overall gains.

If this refinancing story has you thinking about where else capital could work hard in real assets and infrastructure, it may be worth scanning opportunities in 38 power grid technology and infrastructure stocks

VICI Properties now trades at a sizeable discount to published fair value estimates and analyst targets, even after the refinancing announcement. Is this a simple case of the market being overly cautious, or is that discount doing useful work?

Most Popular Narrative: 37% Undervalued

According to a widely followed valuation narrative for VICI Properties, a fair value of $41.86 sits well above the recent $26.36 share price, framing the current discount as substantial in absolute dollar terms.

Given the heavy focus of R.E.I.T.s in rewarding their shareholders with dividend payouts, resulting VICI paying around ~70% of its Free Cash Flow in dividends, we will value the company using a Dividend Discount Model (DDM), using a variable approach, given the ability the company still has of growing its dividends above economy growth rate.

Want a clearer picture of why this narrative lands so far above today’s price? The core assumptions blend steady revenue expansion, very high margins and disciplined payout growth. The interesting part is how those three ingredients interact over time to support that fair value.

Result: Fair Value of $41.86 (UNDERVALUED)

However, VICI Properties relies heavily on gaming and leisure tenants and has expanded its share count in recent years, which could limit per share value if conditions change.

Next Steps

With sentiment on VICI Properties clearly mixed, it may be useful to take a closer look at the full picture and form your own view. You can review both the potential upsides and the concerns in one place through the 5 key rewards and 1 important warning sign

Looking for more investment ideas beyond VICI Properties?

If VICI Properties has sharpened your interest in listed real assets, you might not want to miss other opportunities that line up with your investing style.

• Target reliable income streams by checking companies screened as potential income pillars in the 10 dividend fortresses
• Hunt for quality stocks priced below many fair value estimates through the 52 high quality undervalued stocks
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.