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

Many dividend stocks lost their luster in 2022 and 2023 as the Federal Reserve's interest rate hikes drove investors toward safer CDs and T-bills with higher yields. But in 2024 and 2025, those yields gradually declined as the Federal Reserve cut its benchmark rates five times.

As those fixed-income yields drop, more investors will likely shuffle back toward high-yielding dividend stocks again. When that happens, real estate investment trusts (REITs) -- which are known for paying predictable and high yields -- could attract a lot more attention. Let's take a fresh look at my two favorite REITs, Realty Income (NYSE: O) and Vici Properties (NYSE: VICI), and see which stock is the better income play for 2026 and beyond.

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The similarities and differences between Realty and Vici

Realty and Vici are both property REITs, which means they buy up properties, rent them out, and split that rental income with their investors. Both companies are triple net lease REITs, which means their tenants are responsible for covering all of their own property taxes, insurance premiums, and maintenance costs. As REITs, both companies must distribute at least 90% of their taxable income to their investors as dividends to maintain a lower tax rate.

Realty, which owns over 15,500 commercial properties across the U.S. and Europe, mainly leases its properties to recession-resistant retailers like drugstores, convenience stores, and discount stores. Its top tenants were Walgreens, 7-Eleven, Dollar General, and Dollar Tree in 2024, but no single tenant accounted for over 3.5% of its annualized rent. Some of its tenants grappled with store closures in recent years, but it's kept its occupancy rate -- which hit 98.7% in 2024 -- above 96% since its IPO in 1994. It's also one of the few REITs that pays monthly dividends, and it's raised its payout 132 times since its public debut.

Vici, which owns 93 casinos, resorts, and other entertainment properties across the U.S. and Canada, focuses on big "experiential" businesses. Its biggest tenants include Caesar's Entertainment, MGM Resorts, and Penn Entertainment. It locks those tenants into multidecade leases, and most of those contracts are pinned to the Consumer Price Index (CPI) so it can constantly raise its rent to keep pace with inflation.

The stickiness of those contracts has enabled Vici to maintain a perfect occupancy rate of 100% ever since its IPO in 2018, even as the pandemic and other headwinds rattled its top tenants. It pays quarterly dividends, and it's raised its payout annually for seven consecutive years.

Which REIT is a better value right now?

Realty and Vici, like many other REITs, report their profit growth through their adjusted funds from operations (AFFO) per share instead of their earnings per share (EPS).

From 2019 to 2024, Realty's AFFO per share grew at a compound annual growth rate (CAGR) of 5%. It achieved that growth even as its retailers weathered the pandemic, inflation, and soaring interest rates. It even continued to expand by acquiring its industry peers VEREIT in 2021 and Spirit Realty in 2024.

It expects its AFFO to rise 1% to 2% to between $4.25 and $4.27 per share in 2025 -- which should easily cover its forward dividend rate of $3.23 per share. That high yield of 5.6% and low price-to-AFFO ratio of 13 should also limit its downside potential and draw in more dividend investors.

From 2019 to 2024, Vici's AFFO per share grew at a CAGR of 9% even as the pandemic and other macro headwinds battered its experiential tenants. Unlike Realty, Vici didn't expand aggressively -- and its property count hasn't increased over the past two years. It expects its AFFO per share to rise 4% to 5% to between $2.36 and $2.37 and cover its forward dividend rate of $1.80. It pays a high forward yield of 6.3%, and it still looks like a bargain at 12 times this year's AFFO.

As interest rates decline, it should become cheaper for Realty and Vici to expand their real estate portfolios. Their top tenants should also face milder macro headwinds.

The better buy: Vici Properties

I personally own both of these REITs, but Vici's stronger AFFO growth, perfect occupancy rates, lower valuation, and higher dividends all make it a better buy than Realty right now. Vici's narrower focus and stickier CPI-linked contracts also make it a more reliable long-term play than Realty, which is more exposed to inflationary headwinds.

Leo Sun has positions in Realty Income and Vici Properties. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.