Realty Income is Great, But NNN Does One Thing Better
Key Points
Realty Income and NNN REIT are both net lease REITs.
Realty Income has increased its dividend annually for 31 years; NNN's streak is five years longer.
- 10 stocks we like better than Realty Income ›
Realty Income (NYSE: O) is a very well-run company, which is highlighted by its 31 year streak of annual dividend increases. While Realty Income may be the largest net lease real estate investment trust (REIT), it isn't actually the net lease REIT with the most impressive dividend record. That honor goes to NNN REIT (NYSE: NNN). Here's why investors looking at Realty Income should also be considering NNN REIT.
NNN REIT is tiny in comparison
Realty Income is a globally diversified net lease REIT with a massive $56 billion market cap. It is the net-lease REIT sector's bellwether for good reason. However, its 31-year streak of annual dividend increases is still five years shy of NNN REIT's 36-year streak. And it is important to note that NNN REIT's market cap is a much smaller $7.9 billion.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Scale has advantages in the REIT sector, since it allows Realty Income greater access to capital markets. REITs distribute most of their earnings to shareholders as dividends, so they are always issuing stock and debt to fund growth. So, in important ways, Realty Income's business is better positioned than NNN REIT's.
However, Realty Income's size also means it has to acquire many more properties to grow. With over 15,500 assets, Realty Income's portfolio is materially larger than NNN REIT's portfolio of just under 3,700 properties. Simply put, it takes less for NNN REIT to grow, which means it has more opportunity to grow its dividend.
NNN REIT's focus is on customer-driven growth
This is notable because NNN REIT likes to work with customers it knows well. Over the past 15 years, over 70% of NNN REIT's acquisitions have come from existing relationships. Its relationship-driven approach provides a solid foundation for future dividend growth and would be harder to pull off if it were as large as Realty Income. And its small size means it can also be highly selective with the assets it buys, since it doesn't need to buy as many properties to grow. All in, size has its benefits in both directions, since NNN REIT has clearly proven that being small can work out well for dividend lovers, too.
In other words, if you are considering Realty Income and its 5.3% yield, you might want to consider NNN REIT and its higher 5.7% dividend yield, too. You could find that, sometimes, good things also come in small packages.
Should you buy stock 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 $518,530!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,069,165!*
Now, it’s worth noting Stock Advisor’s total average return is 915% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 1, 2026.
Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends NNN REIT and Realty Income. The Motley Fool has a disclosure policy.
Recommended Articles
