Only 1 of these 2 top REITs is designed to pay you for generations

With the war in the Middle East and rising oil prices, it seems less likely that the Federal Reserve will cut rates in the short term. But it won’t always be like this forever. Once tensions ease and the balance of risks shifts away from inflation to something a little more “normal,” rate cuts may become more likely.

If this change occurs, debt becomes easier and money circulates from one sector to another. One of the biggest beneficiaries of that kind of change is real estate, and REITs look more attractive.

However, there are more than 225 publicly traded REITs in the United States. Some of them are better than others, for reasons that may not be so obvious. Two of the best known in investment circles are Realty Income and VICI Properties.

But which is better as a long-term bet? Let’s find out.

Real estate investment trusts, or REITs, are companies that own and manage income-producing properties. They generate income primarily from rentals and must distribute at least 90% of their taxable income to shareholders in the form of dividends. That’s why they tend to attract dividend investors. The combination of consistent, reliable cash flow and high returns makes them excellent additions to long-term portfolios.

First up is Realty Income, or better known as the “monthly dividend company.”

The REIT focuses on leasing to retail and commercial customers, and its portfolio includes grocery and convenience stores, home improvement centers, dollar stores, fast food chains, pharmacies, restaurants and general merchandise stores.

As of its fourth quarter 2025 filing on February 24, 2026, the REIT “owns or has interests in 15,511 properties, leased to 1,761 customers in 92 industries.”

On the other hand, VICI Properties is an “experiential” REIT that focuses on sports and gaming facilities, resorts, restaurants and other similar properties.

Some of its properties include Caesars Palace, The Venetian Resort, MGM Grand and Chelsea Piers.

According to its fourth-quarter financial results, VICI owns “93 experiential assets, comprised of 54 gaming properties and 39 other experiential properties in the U.S. and Canada.”

Based on that alone, Realty Income has a more diversified property portfolio. Additionally, its tenants tend to operate in more resilient, “core” sectors that are not overly sensitive to large economic cycles.

Meanwhile, VICI’s more concentrated ownership puts it more at odds with economic cycles tied to tourism and discretionary spending.

At first glance, VICI appears to be the riskiest REIT.

But is it really?

VICI Properties operates primarily as a REIT offering triple net leases (NNN). It’s important because tenants pay property taxes, building insurance, and maintenance and repairs—things that landlords generally cover. The result? Lease payments are received net of taxes, insurance and maintenance. Hence the triple net lease.

With this structure, rental income is more predictable and there are fewer unexpected expenses, such as sudden, massive repairs. However, triple net leases also deepen VICI’s dependence on the client’s business health. If a client experiences financial difficulties, VICI may face lease renegotiations, depending on how tight its contracts are. At worst, sector-wide problems can affect several tenants at once.

Now, Realty Income operates in a very similar way and faces the same risks. But the difference is that Realty Income has a much more diversified portfolio, so industry-wide setbacks probably won’t affect it as much.

So how are these two companies doing? Let’s look at quick financial metrics for the entire year 2025.

On a revenue basis, Realty Income is higher and on a net income basis, VICI Properties is more profitable.

However, REITs do not work the same way as other companies. Standard accounting practices always involve depreciation of property. And when your business is purely property leasing, the reported profits may appear lower than the cash the properties actually generate.

So when considering them for dividend, funds from operations, or FFO portfolios, it’s a good starting point.

Funds from operations, or FFO, is a metric that helps investors evaluate a company’s underlying operating performance. That said, FFO is not a measure of cash flow, which is why many investors focus more closely on adjusted FFO when evaluating dividend sustainability. A higher AFFO can generally suggest higher dividends in the future.

And here we can see that Realty Income earns more than 60% more AFFO than VICI Properties.

So let’s see how different AFFO numbers affect its dividends. I’ll use last year’s dividend data, since REIT payouts can fluctuate.

Over the last 12 months, Realty Income paid $3.23 per share in dividends, yielding about 5.36%. It has also been a member of the Dividend Aristocrat list since 2020 and has increased its payouts for 31 consecutive years. And finally, Realty Income’s dividend payments have grown 25% over the last five years.

Meanwhile, VICI Properties paid $1.78 per share last year, which translated to a return of 6.59%. VICI has also increased its dividend for 7 consecutive years and its payouts have grown by 40% in the last 5 years.

Today, a consensus among 24 Wall Street analysts rates Realty Income as a Hold, with an average score of 3.38 out of five. The average price target is $67.47 and the high price target is $75, suggesting an upside of up to 24% over the next year.

Meanwhile, a consensus among 23 analysts rates VICI Property as a Moderate Buy with an average score of 4.26. The average price target is $34.71, while the high price target is $40, suggesting VICI stock could rise as much as 47% over the next year.

Overall, VICI looks more attractive based on analyst sentiment, performance and five-year growth. That said, Realty Income has a longer history of dividend growth and could prove more resilient in a rate cut environment, as its larger scale and greater diversification may make it a more stable beneficiary of lower rates.

As of the date of publication, Rick Orford had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com