Realty Income Vs. Simon Property Group: Which Big Yield Is A Buy? My Investigation Uncovered Surprising Insights

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Realty Income provides a reliable, albeit slow-growing, monthly dividend built on a steadily performing underlying portfolio through varying market conditions.

SPG has a high yield, but it is very sensitive to economic cycles.

Both REITs’ access to capital and scale provide competitive advantages.

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Hispanolistic/E+ via Getty Images Realty Income (NYSE: O ) and Simon Property Group (NYSE: SPG ) operate no moat businesses. Even so, each manages to dominate rivals. Furthermore, both of these REITs possess strong balance sheets, and each sports an impressive yield. However, the risk/reward investment profile of the two tickers is manifest and markedly different.

Realty’s business model tends to perform well during good times and bad. Even during the height of the pandemic, O continued to increase its dividend. However, the REIT’s stable revenue stream comes at a cost: Realty’s leases are lengthy and rent increases are small. Consequently, O relies on acquisitions to fuel growth.

On the other hand, SPG has a history of cutting the dividend during tough economic cycles, and bears claim the trend to ecommerce is sounding the death knell for investors in the stock.My investigation for this article provided surprising insights. Over the long term, high interest rates and recessions can actually work to Realty Income’s advantage. Furthermore, ultimately the trend to ecommerce may benefit Simon Property Group. Realty Income’s Strengths And Weaknesses Realty is one of the few stocks that provide a monthly dividend payment. In fact, Realty has registered a trademark for the phrase “The Monthly Dividend Company”. O is also one of only two REITs that is a member of the S&P High-Yield Dividend Aristocrats Index with a credit […]

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