Best Stock to Buy Right Now: Realty Income vs. Vici Properties

Key Points

• REITs' structure makes them enticing for dividend investors.

• Venerable Realty Income leases primarily to retailers.

• Vici Properties, started less than a decade ago, has gaming and entertainment properties.

• 10 stocks we like better than Realty Income ›

Many investors seek dividend-paying stocks as a way to generate regular income. Choosing among real estate investment trusts (REITs) provides a good way to accomplish this goal.

That's because REITs, which own various types of properties or mortgages, must pay out at least 90% of their taxable income as dividends.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

It's typically a simple business, but REITs have different risk and return profiles. After narrowing the search down to Realty Income (NYSE: O) and Vici Properties (NYSE: VICI), which one makes the better long-term investment?

We have to understand each one's business better before making the determination.

Image source: Getty Images.

Realty Income

Realty Income has been in existence for over five decades. It owns over 15,600 properties.

The company generates most of its rental income from retailers like Dollar General and Home Depot. In fact, the retail sector accounted for about 80% of Realty Income's annual rent.

That's certainly a risk, given the constantly changing technology landscape that makes online shopping easier, faster, and more convenient. However, Realty Income seeks to minimize that risk by seeking tenants that have appealing in-person shopping characteristics.

Based on the company's occupancy rate, which remains high, it doesn't look like it's an issue. In the second quarter, it had a 98.6% occupancy rate. It's also extracting higher rental renewal rates, receiving a 3.4% increase during the quarter.

The business has supported consistently higher dividends. Paying out monthly, the board of directors has raised payouts annually for about 30 years. It typically increases dividends multiple times a year.

Realty Income looks like it can cover its dividends. Management expects adjusted funds from operations (FFO) to reach $4.24 to $4.28 a share (1% to 2% above 2024's $4.19), while it currently has an annualized $3.23 dividend rate. FFO is a key measure for REITs, since it's the cash available for distribution.

Realty Income's stock has a 5.4% dividend yield. For comparison, at the end of July, the FTSE Nareit All Equity REITs Index had a 4% yield.

Vici Properties

Vici Properties, formed in 2017, doesn't have an extensive operating history. It leases its properties to gaming and entertainment companies.

These companies tend to have results that fluctuate with the economic cycle. That's because people travel less when they're concerned about their personal situation.

However, Vici Properties has signed very long-term leases, with an average term remaining of more than 40 years. It also owns some marquee properties, including on the Las Vegas Strip. Some tenants include Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort. Its properties have had a remarkable 100% occupancy rate.

Vici Properties' second-quarter adjusted FFO per share grew about 5% to $0.60. Management expects the figure to reach $2.35 to $2.37 for the year, a 4% to 5% increase from 2024.

The company has raised dividends annually since its 2018 initial public offering (IPO). It currently pays an annualized $1.80 a share.

Vici Properties' stock yields 5.4%.

Which REIT to choose?

It's a close call. Both stocks have performed well since the end of last year through Sept. 10. Realty Income returned 16.2%, while Vici Properties experienced a 16.5% return. They also have similar valuations -- 14 times adjusted FFO -- when using the midpoint of each one's 2025 guidance.

It comes down to investor preference. If you're looking for the more established REIT that has been through challenging times (like the Great Recession), I'd go with Realty Income.

But if you're looking for the newer company that likely has more growth potential, Vici Properties is the way to go.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $640,916!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,012!*

Now, it’s worth noting Stock Advisor’s total average return is 1,052% — a market-crushing outperformance compared to 188% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 8, 2025

Lawrence Rothman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot and Realty Income. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.