Choosing Between Realty Income and W.P. Carey in 2026: Dividend Stability vs. Growth Potential in Net-Lease REITs

For income-focused investors, net-lease REITs like Realty Income (O) and W.P. Carey (WPC) have long been staples of dividend portfolios. However, as 2026 unfolds, the choice between these two industry leaders hinges on a critical trade-off: dividend stability versus growth potential. Both REITs have distinct strategies, risk profiles, and performance trajectories, making them suitable for different investor priorities.

W.P. Carey: Aggressive Growth with a Higher-Risk Profile

W.P. Carey has positioned itself as a high-conviction play in the net-lease sector. In early 2026, the REIT raised its quarterly dividend by 1.1% to $0.92 per share, translating to an annualized payout of $3.68 and a yield of 5.6% based on its closing price of $65.75. This increase follows a disciplined recovery after a significant dividend cut in 2023, when W.P. Carey exited its underperforming office property segment. Analysts now project robust growth, with adjusted funds from operations (FFO) per share expected to rise by 4.9% to 6.2% in 2026, and a potential normalization of 26% FFO/share growth.

The REIT's smaller market capitalization compared to Realty Income allows for a more aggressive investment strategy, focusing on high-margin industrial and manufacturing properties. However, this approach comes with elevated risks. For instance, W.P. Carey's reliance on large, one-time transactions and its exposure to interest rate fluctuations could introduce volatility. Investors seeking capital appreciation and a rising income stream may find W.P. Carey's trajectory compelling, but they must weigh its growth potential against its relatively higher operational complexity.

Realty Income: The Gold Standard of Dividend Stability

Realty Income, by contrast, has built its reputation on consistency. The REIT raised its monthly dividend to $0.27 per share in late 2025, marking its 133rd consecutive increase since its 1994 listing. This results in an annualized dividend of $3.24 and a yield of 5.8%. While its growth rate appears modest- projected at 1.6% FFO growth in the first nine months of 2025-Realty Income's scale ($53 billion market cap) and diversified tenant base provide a buffer against sector-specific risks.

The company's strategy emphasizes long-term, triple-net lease agreements with investment-grade tenants, ensuring predictable cash flows. In 2026, Realty Income plans to expand internationally, including potential large-scale transactions in Europe, and diversify into non-traditional property types like experiential real estate. These moves aim to sustain its dividend growth streak while mitigating domestic market saturation. For risk-averse investors prioritizing uninterrupted income, Realty Income's conservative approach offers a reliable anchor.

The Dividend Dilemma: Stability or Growth?

The choice between these two REITs ultimately depends on investor priorities. W.P. Carey's higher FFO growth projections and recent dividend hikes suggest stronger upside potential, particularly for those willing to tolerate short-term volatility for long-term rewards. Conversely, Realty Income's unbroken dividend growth streak and diversified operations make it a safer bet for income stability.

Data from industry analysts underscores this divergence: W.P. Carey's 2026 FFO/share growth estimates outpace Realty Income's, but the latter's larger market cap and operational maturity reduce downside risk. Additionally, W.P. Carey's yield (5.6%) is slightly lower than Realty Income's (5.8%), reflecting the market's perception of their respective risk profiles.

Conclusion: Aligning Strategy with Investor Objectives

In 2026, both Realty Income and W.P. Carey offer attractive dividend profiles but cater to different investor needs. Aggressive growth seekers may lean toward W.P. Carey, drawn by its higher FFO growth projections and strategic flexibility. Meanwhile, those prioritizing reliability and a proven track record should favor Realty Income's conservative, steady-as-she-goes approach.

As with any investment, due diligence is key. Investors must assess their risk tolerance, time horizon, and income requirements before committing. In the net-lease REIT space, there is no one-size-fits-all solution-only the right balance between stability and growth for each individual portfolio.