W. P. Carey(WPC) The Motley Fool·2025-04-15 09:15Core Viewpoint - Realty Income is a leading net lease REIT with a vast portfolio and a strong appeal to dividend investors, but W.P. Carey may present a more attractive investment opportunity due to its higher growth potential and dividend yield [1][4][9]. Company Overview - Realty Income specializes in owning single-occupant properties where tenants cover most property-level expenses, resulting in low total default risk due to its ownership of over 15,600 properties [2]. - The REIT's portfolio is diversified across North America and Europe, including retail, industrial assets, and unique properties like casinos and data centers, complemented by a 5.8% dividend yield [3]. Growth Potential - Realty Income's growth is expected to be slow, with adjusted funds from operations (FFO) growth projected between 0.7% and 2.2% for 2025 [4]. - In contrast, W.P. Carey, with a market cap about a quarter of Realty Income's, offers a higher dividend yield of 6.2% and is expected to achieve adjusted FFO growth of 2.5% to 4.5% in 2025, indicating a more favorable growth outlook [5][8]. Competitive Landscape - W.P. Carey has a diversified portfolio similar to Realty Income's, having invested in Europe for decades, but faced challenges with a dividend cut in 2024 after exiting the office sector [6][7]. - Despite the dividend cut, W.P. Carey has resumed quarterly increases, positioning itself for future growth, which may appeal to investors looking for better growth prospects [7][10]. Investment Considerations - For investors prioritizing dividend consistency, Realty Income may be the preferred choice due to its reliable dividend history [10]. - However, for those willing to overlook past dividend cuts, W.P. Carey presents attractive benefits, including higher growth potential and a competitive dividend yield [10].