Realty Income vs. Agree Realty: Which Monthly Dividend Stock Rules?

In the world of real estate investment trusts (REITs), two names stand out for their consistent monthly dividend payouts and attractive yields: Realty Income (O) and Agree Realty (ADC). Both REITs focus on freestanding retail properties secured by net leases, offering stable rental income and steady dividends. However, when it comes to selecting the better monthly dividend stock for passive income right now, Realty Income takes the lead.

Realty Income, also known as "The Monthly Dividend Company," boasts an impressive track record of raising its dividend, having done so 119 times since its initial public offering (IPO) in 1994. With a dividend yield of 5.5% and a price-to-adjusted funds from operations (AFFO) ratio of 13.7x, Realty Income offers an attractive combination of high yield and relatively low valuation.

On the other hand, Agree Realty has a lower dividend yield of 3.9% and a higher price-to-AFFO ratio of 18.7x. While Agree Realty has improved its financial position and maintained a consistent dividend since 2012, its lower yield and higher valuation make it relatively less attractive compared to Realty Income.



Realty Income's larger size and more diversified portfolio, including industrial and gaming properties, provide additional stability and growth potential. With over 15,457 properties worldwide and a tenant base spanning 90 industries, Realty Income offers greater geographical and sector diversification compared to Agree Realty's U.S.-focused, retail-dominated portfolio.

Moreover, Realty Income's higher credit rating (A-/A3) and lower leverage ratio (5.4x) indicate its financial strength and ability to maintain and grow dividends. Although Agree Realty has improved its financial profile, Realty Income's stronger fundamentals make it a more attractive choice for passive income investors.

In conclusion, while both Realty Income and Agree Realty are strong candidates for monthly dividend stocks, Realty Income's higher dividend yield, lower relative valuation, greater diversification, and stronger financial profile make it the better buy for passive income right now. Investors seeking a reliable, high-yielding monthly dividend stock should consider Realty Income as an attractive option.