Only 1 of these 2 top REITs is Built to Pay You for Generations

With the war in the Middle East and oil prices rising, it seems chances are slim that the Fed will cut rates anytime soon. But it won’t stay like this forever. Once volatility has eased and the balance of risks has shifted from currency to something more “normal”, rate cuts may become more likely.

And when that changes, borrowing becomes easier, and money circulates from one sector to another. One of the biggest beneficiaries of that kind of change is real estate, and REITs look very attractive.

However, there are more than 225 publicly traded REITs in the United States. Some of them are better than others, for reasons that may not be obvious. Two well known in investment circles are Realty Income and VICI Properties.

But which one is better as a long-term bet? Let’s find out.

Real estate investment trusts, or REITs, are companies that own and manage income-producing properties. They generate income primarily through rent and are required to provide at least 90% of their taxable income to shareholders as dividends. That is why they often attract equity investors. The combination of reliable consistent cash flow and high yield makes them great additions to long-term portfolios.

First is Realty Income, or better known as the “monthly dividend company.”

The REIT specializes in leasing to retail and commercial clients, and its portfolio includes grocery and retail stores, home improvement centers, dollar stores, fast food chains, drug stores, restaurants, and general merchandise stores.

As of its Q4 ’25 filing on February 24, 2026, the REIT “owns or has an interest in 15,511 properties, leased to 1,761 customers across 92 industries.”

VICI Properties, on the other hand, is an “experience” REIT that specializes in sports and entertainment centers, resorts, restaurants, and similar properties.

Some of its locations include Caesars Palace, Venetian Resort, MGM Grand, and Chelsea Piers.

According to its Q4 earnings, VICI owns “93 information assets, consisting of 54 gaming properties and 39 other information properties throughout the US and Canada.”

Based on that alone, Realty Income has a diverse portfolio of properties. Also, its employers tend to work in strong, “core” sectors that are not overly sensitive to major economic cycles.

Meanwhile, VICI’s highly concentrated property ownership puts it at odds with economic cycles associated with tourism and discretionary spending.

On the surface, VICI appears to be a RICKER REIT.

But is it so?

VICI Properties operates primarily as a REIT offering triple-net leases (NNN). It’s important because renters pay property taxes, property insurance, maintenance and repairs for homeowners. generally the cover. The result? Lease payments are received net of taxes, insurance, and maintenance. Therefore, the net rent is triple.

With this property, the rental income is more visible, and there are fewer unexpected expenses, such as sudden, major repairs. However, triple-net leasing also deepens VICI’s dependence on the client’s business life. If the client experiences financial stress, VICI may face rent negotiations, depending on how tight its contracts are. Worse comes to worst, sector-wide problems may affect many employers at once.

Now, Realty Income works the same way and faces the same risks. But the difference is that Realty Income has a very diversified portfolio, so the industry-wide downturn won’t affect it as much.

So, how are these two businesses doing? Let’s take a look at some quick financial metrics for the full year 2025.

In terms of income, Realty Income is large, and based on income, VICI Properties is very profitable.

However, REITs do not operate in the same way as other companies. Standard accounting procedures always involve depreciation. And if your business is rental property only, the reported income may look lower than the income generated by the property,

That’s why, if you’re considering them in an equity portfolio, funds from operations, or FFO, is a good place to start.

Funds from operations, or FFO, is a metric that helps investors evaluate a company’s underlying performance. That said, FFO is not a measure of cash flow, which is why many investors focus more on adjusted FFO when assessing profitability sustainability. A higher AFFO can often suggest higher earnings in the future.

And here, we can see that Realty Income earns over 60% more AFFO than VICI Properties.

So let’s see how different AFFO numbers affect their earnings. I will use last year’s dividend data, as REIT payouts can fluctuate.

Over the past 12 months, Realty Income paid $3.23 per share for the last period and has an annual yield of 5.36%. It has also been a member of the Dividend Aristocrat list since 2020 and has increased its payouts for 31 straight years. Finally, Realty Income’s dividend payouts have grown 25% over the past five years.

Meanwhile, VICI Properties paid $1.78 per share last year, translating to a yield of 6.59%. VICI has also increased its dividends for 7 consecutive years, and its payouts have grown 40% over the past 5 years.

Today, the consensus among 24 Wall Street analysts rate Income Realty Hold, with an average score of 3.38 out of five. The average price target is $67.47, and the highest price target is $75, suggesting a 24% upside in the next year.

Meanwhile, the consensus among 23 analysts rates VICI Property a Moderate Buy with an average score of 4.26. The average price target is $34.71, while the highest price target is $40, suggesting that VICI stock could rise as much as 47% in the next year.

Overall, VICI looks very attractive based on analyst sentiment, yield, and five-year growth. That said, Realty Income has a long track record of dividend growth and could prove more resilient in a downgrade environment, as its large scale and broad diversification may allow it to gradually capitalize on lower valuations.

As of the date of publication, Rick Orford did not have (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com