High-Yield REIT Stocks: One to Buy, One to Avoid

As the bull market continues, investors are seeking high-yield dividend stocks to boost their portfolios. Real Estate Investment Trusts (REITs) have been a popular choice, offering attractive yields and steady growth. However, not all REITs are created equal. In this article, we'll explore one high-yield REIT stock to buy and one to avoid.

Realty Income (NYSE: O) - The Monthly Dividend Stock to Buy

Realty Income, also known as "The Monthly Dividend Company," is a leading net-lease REIT with a diversified portfolio of over 15,450 properties. The company's focus on long-term net lease agreements with commercial clients provides a stable and predictable income stream. Realty Income has increased its dividend for 30 consecutive years, with a current yield of 5.6%.

The company's investment-grade balance sheet and strong credit rating allow it to access capital markets at attractive costs, enabling it to maintain and grow its dividend payouts. Realty Income's diversified portfolio mitigates risk, as any single property is a small portion of the overall portfolio. The company's consistent dividend growth and history of increasing payouts make it a reliable choice for income-focused investors.



AGNC Investment Corp. (NASDAQ: AGNC) - The High-Yield REIT to Avoid

AGNC Investment Corp. is a mortgage real estate investment trust (REIT) that invests in mortgage securities. While the company offers a nearly 15% yield, it is not suitable for income-focused investors seeking reliable dividend streams. AGNC's dividend has been volatile and has experienced cuts in the past, primarily due to its complex investment strategy in mortgage securities.

AGNC's focus on mortgage securities exposes it to market fluctuations and potential defaults. The company's dividend rose sharply after its IPO but started to decline as the dividend became unsustainable. Reinvesting dividends has led to significant total returns, but spending them would have resulted in a smaller income stream and a material loss on the initial investment.



In conclusion, Realty Income is an attractive high-yield REIT stock for income-focused investors, thanks to its diversified portfolio, consistent dividend growth, and reliable income stream. On the other hand, AGNC Investment Corp.'s volatile dividend history and exposure to mortgage securities make it a less suitable choice for investors seeking reliable income. As always, it's essential to conduct thorough research and consider your investment goals and risk tolerance before making any investment decisions.