Realty Income(NYSE: O) is the largest net-lease real estate investment trust (REIT), sporting a market cap of $53 billion. W.P. Carey(NYSE: WPC) is the second-largest net lease REIT, with a market capitalization of just under $15 billion.
Both of these REITs have dividend yields of around 5.5%. Here’s why you might want to pick one over the other.
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Both Realty Income and W.P. Carey use the net lease approach. Essentially, they own single-tenant properties for which the tenant is responsible for most property-level operating costs. Owning any single property is high risk, as it has only one tenant; however, across a large enough portfolio, the risk is fairly low. This is because net lease REITs avoid the expense and work of maintaining their assets.
Realty Income is huge, with more than 15,500 properties. W.P. Carey’s portfolio is smaller, with around 1,650 assets. This is where one very important difference comes into play for these two net lease REITs.
Roughly 80% of Realty Income’s portfolio is dedicated to retail assets. These tend to be smaller properties that are very similar in nature. That makes them easy to buy, sell, and lease again as needed. Nearly two-thirds of W.P. Carey’s portfolio consists of industrial assets. Warehouses and factories tend to be larger structures that are harder to buy, sell, and re-lease.
Given the portfolio, Realty Income is likely to be attractive to more conservative dividend investors. Since both REITs have dividend yields of around 5.5%, it would be pretty easy to justify such a decision. The problem is that W.P. Carey likely has more opportunity for growth.
The interesting thing about these two REITs is that they have been looking increasingly similar over time. For example, W.P. Carey has long invested in Europe, a region where Realty Income has also started to invest. Realty Income, meanwhile, exited the office sector a few years before W.P. Carey made the same decision.
That said, there was a notable difference in the office divestitures. Realty Income was able to pull that off without a dividend cut, while W.P. Carey shareholders got hit with a dividend reset.
To be fair, W.P. Carey’s dividend started growing during the quarter after the cut. And it has been increased every quarter since, so the cut was clearly made from a position of strength. Still, the 2023 dividend cut is another reason for conservative investors to err on the side of caution and buy Realty Income. For reference, Realty Income has increased its dividend annually for 30 consecutive years.
Don’t count W.P. Carey out, however, because it offers something that Realty Income probably can’t: faster growth. There is simple math regarding portfolio size, as it is easier to grow from a small base. However, W.P. Carey also tends to be somewhat more aggressive in its investment approach. That includes working with riskier tenants that are willing to accept lease terms that are more favorable to their landlord.
The growth opportunity with W.P. Carey was on clear display in the third quarter of 2025. The REIT’s adjusted funds from operations (FFO) per share rose nearly 6% compared to a rise of roughly 3% for Realty Income. While it probably isn’t reasonable to expect W.P. Carey to grow twice as fast as Realty Income for extended periods of time, it is reasonable to expect the smaller REIT to be more growth-oriented. That is likely to translate into faster dividend growth, as well.
If your goal is to own boring and reliable dividend stocks, the better choice here is pretty clearly Realty Income. If you are looking for a combination of growth and income, and are willing to take on a little more risk, W.P. Carey is likely the better option. However, the best choice of all might actually be to buy both of these net-lease REITs. That way, you benefit from a diversified portfolio of properties and a better balance between risk and reward.
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Reuben Gregg Brewer has positions in Realty Income and W.P. Carey. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.
