Realty Income vs NNN REIT: The Dividend Stocks Showdown

In a recent report, Realty Income and NNN REIT are highlighted as elite dividend stocks, boasting yields significantly above the S&P 500 average. While both have impressive financial profiles, Realty Income's diversified portfolio and faster growth rate set it apart, making it an attractive option for investors.

Date: 14-12-2024

AI Rating: 7

The report draws attention to two prominent real estate investment trusts (REITs), Realty Income and NNN REIT, both of which are recognized for their enduring dividend performance. Each has consistently raised their dividends for over 30 years, with current yields around 5.5%, overshadowing the S&P 500 yield of 1.2%. Such high dividend yields tend to attract income-focused investors and could support their respective stock prices in the market.

Furthermore, an analysis of their financial profiles reveals some critical components that could influence stock prices:

Dividend Yield: Realty Income has a dividend yield of 5.6%, compared to NNN REIT's 5.4%. This slight edge in yield makes Realty Income more appealing to potential investors seeking greater returns.
Dividend Payout Ratio: Realty Income’s payout ratio stands at 75.1%, while NNN REIT has a lower ratio of 69%. A lower payout ratio generally suggests a greater ability to maintain or increase dividends, which can positively influence investor perception and confidence.
2024 AFFO Growth Rate: Realty Income is projected to have a midpoint AFFO growth rate of 4.8%, significantly higher than NNN REIT's 2.1%. This forecast indicates that Realty Income is expected to grow at nearly double the rate of its competitor, potentially leading to an appreciation in its stock price.
Price-to-AFFO Ratio: Realty Income's Price-to-AFFO ratio is 13.5x, while NNN REIT's is 12.8x. A lower Price-to-AFFO ratio often suggests greater value, which can attract value-focused investors.

Overall, Realty Income's diversification, stability, and stronger growth profile position it effectively to outperform NNN REIT. These factors likely boost investor sentiment and could lead to higher stock valuations in the future.

Stocks: O NNN