Comparing the Growth Potential of High-Yield REIT Stocks: Realty Income vs. Agree Realty vs. W.P. Carey
Forget Realty Income: 2 High-Yield REIT Stocks to Buy Instead
Realty Income is a great company, but it is a tortoise. You might want to consider Agree Realty and W.P. Carey instead. It would probably be a mistake to simply forget about net-lease giant Realty Income (NYSE: O). It is a well-run company, but it poses some problems for investors when you dig into the story a bit. For those looking for a bit more growth, competitors Agree Realty (NYSE: ADC) and W.P. Carey (NYSE: WPC) might be more attractive.
I happily own Realty Income
There's nothing inherently wrong with Realty Income. In fact, I own it and I'm glad I do. But it isn't the perfect real estate investment trust (REIT). Like every company, it comes with some negatives.
- Realty Income's market cap is around $48 billion.
- Agree's market cap is just $6 billion or so.
- Realty Income owns more than 15,400 properties, while Agree owns around 2,100 properties.
Realty Income is a foundational investment for a more diversified dividend portfolio. That's why investors might want to consider alternatives or companion stocks like Agree Realty or W.P. Carey.
Agree Realty is growing
Realty Income's market cap is around $48 billion. Agree's market cap is just $6 billion or so. Realty Income owns more than 15,400 properties, while Agree owns around 2,100 properties. Clearly, Agree is a smaller REIT. But that is a good thing if you are interested in growth.
- Simple math tells you that it requires less investment in new properties to have an impact on Agree's top and bottom lines.
- Dividend growth of 70% over the past decade for Agree, dwarfing the 40% that Realty Income achieved.
- Since Agree is focusing on U.S. retail assets, it lacks the diversification of Realty Income, which likely increases its risk a little.
But if you are focused on dividend growth, Agree could be the better choice for you.
Shifting gears at W.P. Carey
It is very easy to dislike W.P. Carey today, given that the REIT did the unthinkable -- namely, it cut its dividend. This was part of what will end up being a transition year for this $13 billion market cap net-lease REIT. That said, it is worth noting that the dividend is already back in growth mode.
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This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.