Four REITs Offer More Income Than Realty Income, With Different Risks
VICI, W.P. Carey, NNN REIT and EPR offer yields near 6% to 8% and covered payouts, but tenant concentration, refinancing costs and overseas exposure make the higher income far from interchangeable.
Realty Income is a common starting point for net-lease investors, but four peers currently offer higher yields or faster payout growth. The comparison is useful only if the income is matched with the risk that produces it.
VICI Properties offers the highest indicated yield in the group at about 8.0%. Its annualized dividend is $1.84 a share, while full-year adjusted funds from operations, or AFFO, guidance stands at $2.45 to $2.47 a share. That implies a payout near 75% of the guidance midpoint. Second-quarter AFFO per share rose 4.6%, and VICI raised its quarterly dividend to $0.46.
Concentration versus inflation protection
VICI’s leases are long and occupancy is 100%, but Caesars and MGM together contribute roughly 70% of rent. The yield compensates investors for that concentration and for sensitivity to gaming demand.
W.P. Carey yields about 6.0% and has rebuilt its dividend after cutting it during the 2023 office exit. More than 99% of base rent has contractual increases and 47.8% is linked to inflation. The trade-off is overseas exposure, including a 2.6% decline in European same-store rent in constant currency.
NNN REIT combines a roughly 6.2% yield with 37 consecutive years of annual dividend increases. Its payout uses about 69% of AFFO, occupancy is 99.1% and only 2.5% of debt is floating-rate. The immediate risk is refinancing a $350 million maturity at a higher interest rate.
Monthly income, concentrated tenants
EPR Properties pays monthly and yields about 6.8%. Second-quarter AFFO rose 15.3%, and the annualized $3.72 dividend uses about 68% of the midpoint of adjusted FFO guidance. Yet Topgolf and AMC each account for about 13.1% of revenue, and the top ten customers generate 63.7%.
Official filings support the operating direction. VICI reported 4.6% AFFO-per-share growth and later raised its dividend, while EPR increased earnings and investment-spending guidance after AFFO grew 15.3%.
The four payouts are covered by current cash-flow measures, but they are not substitutes. VICI carries casino concentration, W.P. Carey combines inflation-linked rent with foreign exposure, NNN faces refinancing costs and EPR depends on a small group of experiential tenants. A diversified basket can reduce issuer risk, but it cannot remove the interest-rate and tenant risks shared by net-lease REITs.