Gaming & Leisure Properties (Nasdaq: GLPI) is a real estate investment trust (REIT) that owns properties leased to gaming operators. It has 59 properties in 18 states, including Tropicana Las Vegas, Boomtown New Orleans, and Hard Rock Hotel & Casino in Biloxi, Mississippi.

It currently pays a $0.72 per share quarterly dividend, which comes out to a yield of 5.8%. The company is also paying an additional $0.25 per share special dividend this week.

Can investors expect to continue to receive the dividend? Or are they more like red-eyed gamblers, feeding the slot machine at 5 a.m. and hoping it will pay out?

Since Gaming & Leisure Properties is a REIT, we measure its cash flow by looking at funds from operations, or FFO.

The company’s FFO has been steadily rising for several years.

You may be surprised to see that FFO even climbed in 2020 when everything was shut down due to the pandemic. But remember, Gaming & Leisure Properties doesn’t operate the casinos.

It doesn’t book hotel rooms, water down free drinks or make sure no one is counting cards. It simply collects the rent. And if Caesars Entertainment, Bally’s and Boyd Gaming wanted to make sure their casinos were going to rake in the cash as soon as people returned after the pandemic, they had to continue to pay their rent.

Nevertheless, the company did lower its dividend in the second quarter of 2020 from $0.70 per share to $0.60. Prior to that, it had raised the dividend every year, starting when it first paid one in 2014, and it has now raised the dividend five times since 2020.

The payout ratio on FFO in 2022 was 87%. Since REITs have to pay out 95% of their profits in dividends, they often pay most of their cash flow out as well. Anything below 100% is within my comfort zone. This year, the payout ratio is expected to be the same.

Investors won’t need to be lucky to continue to receive their dividend. In fact, they’ll likely have to be quite unlucky – like a dealer pulling a six out of the deck when he hits on 16 – to not get paid.

Only a global pandemic has so far disrupted the company’s solid dividend history.

Dividend Safety Rating: B

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