VC is attractive at its current price due to a 7% yield and valuation below book value, representing a medium-risk opportunity with a likely 7% return.

a lot of comments about VC properties and I must say it looks good with a 7 plus% yield. If you look at VC, you own the gaming properties, Las Vegas, 63 gaming properties, 40 other experiential properties, Caesar Palace, Las Vegas, MGM Grand, all interesting situations.

You look at the stock price, it is close to a few years lows. the dividend yield is 7%. But when it comes to investing in real estate, yes, it is about owning those properties, but it is also the question, how do you own that and what is the price you're paying for that?

Let's discuss. If we look at the company, the last earnings, everything looks very good. 100% occupancy rate, long-term leases, everything stable, planned, loan to net leverage ratio below five, which is on the better side of some reads that I have seen.

Equity 29 billion. Then if we look at the numbers, very stable. If we look at the dividend, stable over the last few quarters, earnings also stable. everything like real estate should be stable and safe.

If we look at the balance sheet, 29 billion equity, compare it to the market cap, we are practically buying below book value of the properties. Everything is really nicely and this is something I like shown every deal, every real estate property looks stable, partnerships, 16 tenants, okay, Caesars and MGMs, they cannot default on one property. they have to default on all the properties.

So that is something that helps the guidance there is for some or no growth stable we can say for stability.

Now because of the concentration with one customer Moody's cannot give it better than a lower investment grade. But okay, the debt is not even that crazy and all the debt is discussed in detail. 44 4.5 effective rate.

However, something when it comes to interest rates and why the stock is down. It's not 4.5. The next repricing will be at 5.5, 5.7 depending on where interest rates go.

Okay. But there is both the gaming pipeline, Caesar's forum, something building. This is something very important. They have an annual escalator for inflation, but it is not crazy.

They need to wait a few years to renegotiate that and it's a little bit below true inflation, a little bit below true interest rates. So that is another reason why the stock is down.

A third reason is that this is a spin-off from when Caesar's Entertainment went bankrupt. The value in the real estate remained. They also survived the pandemic. Very important.

So interesting. There have been they have their history.

But okay, now Caesar's Entertainment will be acquired, which is another negative for Wall Street because it will not need to report numbers. So we will not know the health of the tenants but that is something then it's more levered more risky but the real estate is not going anywhere.

The thing that explains what's going on is interest rates up, interest costs up. There might go to growth over the next few years. Two tenants. Okay. Inflation escalators are too low and capped at three 3.5%.

Private tenants traffic down in Las Vegas in 2025.

You let me know in the comments if traffic is up, you gambler. But okay, what's there to like? The key question is what it's worth to you. dividend 7%. Will it grow? Maybe not next year.

Maybe not the next few years. Over the long term, especially if interest rates go down, then it will keep on growing.

Keep in mind, some of you have to pay taxes on the dividends. Some don't. That's a very important factor when it comes to analyzing this. If the stock goes lower, you can always reinvest and build more of the stream of cash flows of the long term.

If good times come, low interest rates and then keep on paying. When it comes to four, five% yield, you sell. You play around that given the stability, given everything.

I'll put it here in the quadrant. 7% likely return, medium risk, why not? And then you have to see how it fits you. Inflation protection is not immediate, but there are the properties.

There is the escalator. The key risk is Vegas gambling lever tenants that has to work all the time but the value is there.

Just another explanation of why the stock is down. The dividend yield was 4% now it's 7%. The 10-year treasury was 1% now it's 4.7%. So plus 300 basis points the yield went up treasury went up and consequently the required yield went up.

We cannot predict interest rates. Not even Wars knows. But what we have to know is how does real investing this 7% fit your portfolio, your financial goals and then you see how much of it to add at this price to your portfolio.

Keep in mind if interest rates on the 10-year Treasury go from 4.7 to 6.7, dividend yield on VC goes from 7 to 9 10%. The stock goes down another 30%. That's a given.

But you have to invest. Okay. If that happens, I will be buying more, accumulating more. That's something to think about when it comes to investing.