Investing in dividend stocks is widely recognized as an effective strategy for generating substantial passive income on an annual basis. High-quality companies frequently issue substantial dividends, allowing investors to multiply their passive income potential from each dollar invested.

One company that has consistently proven to be a strong choice for income-focused investors is VICI Properties (NYSE: VICI). This real estate investment trust (REIT) has established itself as a standout option for those looking to generate reliable dividend income. Lets delve into how many shares you would need to own of this REIT to achieve an annual dividend income of $5,000.

VICI Properties boasts a remarkable portfolio of experiential real estate, which includes three of the most iconic casinos located on the illustrious Las Vegas Strip: Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort Las Vegas. The REIT leases these properties to operating companies through long-term triple net (NNN) leases. This leasing strategy ensures a stable and ever-growing rental income stream, which serves as the foundation for dividend payments.

Currently, VICI Properties pays a quarterly dividend of $0.4325 per share, translating to an annual dividend of $1.73 per share. To amass $5,000 in dividend income each year, an investor would need to own approximately 2,890 shares of the REIT. Given that the share price has recently hovered around $32.50, this would mean an investment of over $94,000 in VICI Properties to achieve that targeted level of annual income.

While this may seem like a significant amount of capital, it is comparable to the upfront costs associated with purchasing a rental property. Factors such as closing costs, down payments, and necessary repairs to make a home rental-ready can accumulate quickly. Moreover, investing in VICI offers the advantage of receiving passive dividend income almost immediately, eliminating the need for the active management often required with rental properties.

In fact, this investment is much more cost-effective compared to the amount you would need to allocate to an S&P 500 index fund to generate a similar level of annual dividend income. Given the S&P 500s current lower dividend yield of approximately 1.4%, an investor would need to commit over $350,000 to an S&P 500 index fund to garner $5,000 in dividend income.

Looking ahead, VICI Properties appears poised for continued growth in its dividend payouts. The REIT has a remarkable track record, having increased its dividend each year since its inception a total of seven consecutive years. Notably, the company has achieved a compound annual growth rate (CAGR) for its dividends of about 7%. This combination of a high yield and consistent growth makes VICI Properties a compelling option for anyone seeking a reliable dividend stock for passive income generation.

However, potential investors should carefully consider their options. Recent analyses from The Motley Fools Stock Advisor team have highlighted ten stocks that they believe represent the best investment opportunities at the momentand notably, VICI Properties did not make that prestigious list. These ten highlighted stocks are expected to yield substantial returns in the coming years, prompting investors to weigh their choices carefully before diving into the market.