Rexford Industrial vs. W.P. Carey: The Dividend Showdown

Alright, fellow investors, let's dive into the world of real estate investment trusts (REITs) and compare two industrial-focused powerhouses: Rexford Industrial (REXR) and W.P. Carey (WPC). Both have their unique strengths and quirks, so let's break down the key factors to help you make an informed decision.



1. Diversification: W.P. Carey vs. Rexford's Focus

W.P. Carey is the tortoise of the two, with a diversified portfolio spread across North America and Europe. It owns industrial properties (64%), retail properties (21%), and a mix of other assets (15%). This diversification provides a stable foundation, but it might not offer the same growth potential as a more focused approach.

Rexford Industrial, on the other hand, is the hare, completely focused on the Southern California industrial market. This concentration allows Rexford to capitalize on the region's strong demand and low vacancy rates, but it also exposes the company to market-specific risks.



2. Dividend Yield: W.P. Carey's High Yield vs. Rexford's Growth

W.P. Carey offers a higher dividend yield of around 6.4%, which is attractive for income-focused investors. However, its dividend growth has been modest, with low- to mid-single-digit increases expected in the future.

Rexford Industrial's dividend yield is lower at around 4.3%, but its dividend growth has been nothing short of impressive. With a compound annual growth rate of roughly 13.5% over the past decade, Rexford's dividend has more than doubled in the past five years alone.

3. Dividend Growth: Rexford's High Growth vs. W.P. Carey's Stability

Rexford's dividend growth has been nothing short of remarkable, with double-digit increases over the past one, three, and five years. This high growth rate is likely to continue, given the company's focus on the strong Southern California industrial market and its history of redeveloping assets and acquiring new properties.

W.P. Carey's dividend growth has been more modest, with low- to mid-single-digit increases expected in the future. However, the company's recent dividend reset following its exit from the office sector has put it back on a growth path, with quarterly increases since the reset.



4. The Final Showdown: Which REIT is Right for You?

If you're looking for a high-yielding, diversified REIT with a stable dividend, W.P. Carey is the clear choice. Its higher dividend yield and diversified portfolio provide a solid foundation for income-focused investors.

However, if you're willing to take on a bit more risk in exchange for higher growth potential, Rexford Industrial might be the better fit. Its focus on the Southern California industrial market and history of dividend growth make it an attractive option for investors seeking capital appreciation and income growth.

Ultimately, the choice between Rexford Industrial and W.P. Carey depends on your investment goals, risk tolerance, and time horizon. Both REITs have their strengths and quirks, so consider your personal preferences and financial situation before making a decision.

In the world of REITs, there's no one-size-fits-all answer. But with Rexford Industrial and W.P. Carey, you have two fantastic options to choose from. So, which REIT will you add to your portfolio? The choice is yours!