Gaming and Leisure
This is a very unique and interesting way to play the gaming sector and generate income. Gaming and Leisure Properties Inc. (NASDAQ: GLPI) is a real estate investment trust (REIT) engaged in the business of acquiring, financing and owning real estate property to be leased to gaming operators in triple-net lease arrangements. Pursuant to this, the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
The company expects to continue to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. They also intend to diversify the corporate portfolio over time, including by acquiring properties outside the gaming industry to lease to third parties. The company’s current portfolio consists of 44 casinos, including two TRS properties and the real property associated with 42 facilities spread around the United States.
Gaming and Leisure offers shareholders an outstanding 6% distribution. The $47 Merrill Lynch price target compares with the $45.47 consensus target, as well as the most recent closing price of $46.87.
This company is in one of the fastest-growing subsectors of the REIT industry. Omega Healthcare Investors Inc. (NYSE: OHI) is a publicly traded, internally managed health care REIT that is focused on owning skilled nursing facilities. The company also owns assisted living facilities, specialty facilities and a medical office property.
The company’s portfolio of assets is operated by a diverse group of health care companies, predominantly in a triple-net lease structure. The assets span all regions within the United States, as well as in the United Kingdom.
Omega’s tenants generally have lower exposure to Medicare, which is where the funding pressures tend to remain, and less than 10% of revenues come from tenants with rent coverage below 1.0 times. In addition, the tenant base is very well diversified.
Shareholders receive a very strong 6.19% distribution. Merrill Lynch has set its price target at $45. The consensus is target is $43.38, but note that the shares closed most recently at $43.30.
Four different areas of the market to choose from, and all these companies pay dependable 6% or better dividends. It is important to note that both REITs and MLPs pay distributions that could result in the return of principal. With that in mind, the continued low-interest-rate scenario bodes well for these stocks that serve as bond proxy vehicles.
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