With the warfare within the Center East and oil costs climbing, it appears to be like much less probably that the Fed will lower charges anytime quickly. Nevertheless it’s not at all times going to be like this endlessly. As soon as tensions ease and the steadiness of dangers shifts from inflation to one thing a bit extra “regular”, charge cuts might turn into extra probably.
If and when that shift occurs, borrowing turns into simpler, and cash cycles out of some sectors into others. One of many largest beneficiaries of that form of change is actual property, and REITs look extra engaging.
Nonetheless, there are over 225 REITs which can be traded publicly in the USA. A few of them are higher than others, for causes that will not be as apparent. Two of probably the most well-known in investing circles are Realty Revenue and VICI Properties.
However which one’s higher as a long-term wager? Let’s discover out.
Actual property funding trusts, or REITs, are corporations that personal and handle income-producing properties. They generate income primarily from lease and are required to distribute not less than 90% of their taxable revenue to shareholders as dividends. That’s why they have a tendency to draw dividend traders. The mix of reliably constant money circulation and excessive yields makes them nice additions to long-term portfolios.
First up is Realty Revenue, or higher often called the “month-to-month dividend firm.”
The REIT focuses on leasing to retail and business purchasers, and its portfolio contains grocery and comfort shops, dwelling enchancment facilities, greenback shops, fast-food chains, drug shops, eating places, and basic merchandise shops.
As of its This autumn ‘25 submitting on February 24, 2026, the REIT “owns or holds pursuits in 15,511 properties, leased to 1,761 purchasers throughout 92 industries.”
However, VICI Properties is an “experiential” REIT that focuses on sports activities and gaming amenities, resorts, eating places, and different related properties.
A few of its properties embrace Caesars Palace, The Venetian Resort, the MGM Grand, and the Chelsea Piers.
As of its This autumn financials, VICI owns “93 experiential belongings, made up of 54 gaming properties and 39 different experiential properties throughout the U.S. and Canada.”
Primarily based on that alone, Realty Revenue has a extra diversified portfolio of properties. Additionally, its tenants are inclined to function in additional resilient, “staple” sectors that aren’t overly delicate to main financial cycles.
In the meantime, VICI’s extra concentrated property possession places it extra at odds with financial cycles tied to tourism and discretionary spending.
On the floor, VICI seems to be the riskier REIT.
However is it, actually?
VICI Properties primarily operates as a REIT offering triple-net leases (NNN). It is vital as a result of the tenants pay for property taxes, constructing insurance coverage, and upkeep and repairs- issues that landlords normally cowl. The consequence? Lease funds are acquired internet of taxes, insurance coverage, and upkeep. Therefore, the triple internet lease.
With this construction, lease revenue is extra predictable, and there are fewer surprising bills, corresponding to sudden, large repairs. Nonetheless, triple-net leases additionally deepen VICI’s dependence on the shopper’s enterprise well being. If a shopper experiences monetary misery, VICI might face lease renegotiations, relying on how ironclad its contracts are. Worst involves worst, sector-wide points might hit a number of tenants directly.
Now, Realty Revenue operates a lot in the identical method and faces the identical dangers. However the distinction is is that Realty Revenue has a much more diversified portfolio, so industry-wide setbacks gained’t probably have an effect on it as a lot.
So, how are these two companies doing? Let’s have a look at fast monetary metrics for the complete yr of 2025.
Metric
Realty Revenue (O)
VICI Properties (VICI)
Income
$5.75 B
$4.0 B
Internet revenue
$1.06 B
$2.8 B
FFO per share
$4.25
$2.61
AFFO per share
$4.28
$2.38
By income, Realty Revenue is bigger, and based mostly on internet revenue, VICI Properties is extra worthwhile.
Nonetheless, REITs don’t function the identical method as different corporations. Commonplace accounting practices at all times contain depreciation of property. And when what you are promoting is solely property leasing, reported earnings can look decrease than the money the properties are literally producing,
That’s why, when contemplating them for dividend portfolios, funds from operations, or FFO, is an effective place to begin.
Funds from operations, or FFO, is a metric that helps traders consider an organization’s underlying working efficiency. That mentioned, FFO isn’t a measure of money circulation, which is why many traders focus extra carefully on adjusted FFO when assessing dividend sustainability. Greater AFFO can usually recommend larger dividends sooner or later.
And right here, we will see that Realty Revenue earns over 60% extra AFFO than VICI Properties.
So let’s see how the differing AFFO numbers have an effect on their dividends. I’ll be utilizing final yr’s dividend knowledge, since REIT payouts can fluctuate.
Over the past 12 months, Realty Revenue paid $3.23 per share in dividends, yielding round 5.36%. It’s additionally been a member of the Dividend Aristocrat checklist since 2020 and has elevated its payouts for 31 straight years. And at last, Realty Revenue’s dividend payouts have grown 25% within the final 5 years.
In the meantime, VICI Properties paid $1.78 per share final yr, translating to a 6.59% yield. VICI additionally elevated its dividends for 7 straight years, and its payouts have grown by 40% during the last 5 years.
Immediately, a consensus amongst 24 Wall Road analysts charge Realty Revenue a Maintain, with a mean rating of three.38 out of 5. The imply worth goal is $67.47, and the excessive worth goal is $75, suggesting as a lot as 24% upside over the following yr.
In the meantime, a consensus amongst 23 analysts charge VICI Property a Reasonable Purchase with a mean rating of 4.26. The imply worth goal is $34.71, whereas the excessive worth goal is $40, suggesting VICI inventory may surge as a lot as 47% over the following yr.
Total, VICI appears to be like extra engaging based mostly on analyst sentiment, yield, and five-year progress. That mentioned, Realty Revenue has an extended historical past of dividend progress and will show extra resilient in a rate-cut surroundings, as its bigger scale and broader diversification might make it a steadier beneficiary of decrease charges.
On the date of publication, Rick Orford didn’t have (both immediately or not directly) positions in any of the securities talked about on this article. All data and knowledge on this article is solely for informational functions. This text was initially revealed on Barchart.com
