Realty Income (O +1.31%) continues to impress with its 31-year streak of annual dividend increases, solidifying its status as a leading net lease real estate investment trust (REIT). However, investors may want to consider NNN REIT (NNN +1.00%), which boasts an even longer 36-year dividend growth record despite its smaller market cap of $7.9 billion compared to Realty Income’s $56 billion. This size disparity presents unique advantages and challenges for both companies in terms of growth and capital access.
While Realty Income’s scale allows for greater access to capital markets, it necessitates the acquisition of a larger number of properties to sustain growth. In contrast, NNN REIT’s smaller portfolio of approximately 3,700 properties enables it to be more selective and leverage established customer relationships, which can lead to more consistent dividend growth opportunities.
For investors weighing options, Realty Income offers a 5.3% yield, but NNN REIT’s higher 5.7% yield may appeal to those focused on dividend growth potential. This comparison highlights the benefits of both large and small REITs in a diversified investment strategy.
Source: fool.com