AGNC Investment (AGNC -0.39%) has long been a go-to choice for dividend investors, thanks to its eye-popping 14% yield. But its reliance on mortgage-backed securities (MBS) could put its payouts at risk in a lower interest rate environment. With its net spread and dollar roll income per share declining, income investors may want to look elsewhere. Two alternative real estate investment trusts (REITs), Realty Income (O 0.92%) and Vici Properties (VICI 1.41%), may offer more stability and long-term reliability.
Realty Income’s Consistent Returns and Monthly Payouts
Realty Income, a retail REIT, boasts a portfolio of approximately 15,600 real estate properties worldwide. With tenants like Dollar General, Dollar Tree, Walgreens, and 7-Eleven, it has managed to maintain a remarkable occupancy rate above 96% since its IPO in 1994.
Unlike mortgage REITs, Realty Income generates revenue by leasing its properties. Despite retail turbulence in recent years, its well-diversified tenant base has kept its earnings steady. The company is legally required to distribute at least 90% of its pre-tax profits as dividends, making it a reliable income source for investors.
- Realty Income has increased its dividend 130 times since its IPO.
- The REIT’s current forward dividend yield stands at 5.7%.
- Over the past decade, its total return, including dividends, has outpaced AGNC’s.
While AGNC’s yield is significantly higher, Realty Income offers a more predictable payout. Its adjusted funds from operations (AFFO) per share grew at a 5% compound annual growth rate (CAGR) over the past decade, and it expects 2025 AFFO per share to rise another 1%-2% to $4.22-$4.28. At $56 per share, the stock remains attractively priced at 13 times this year’s expected AFFO.
Vici Properties: A Different Kind of REIT with Rock-Solid Tenants
Vici Properties sets itself apart as an experiential REIT, owning 93 casino and entertainment properties across the U.S. and Canada. Its major tenants include Caesars Entertainment, MGM Resorts, Penn Entertainment, and Century Casinos, all locked into long-term leases with built-in rent escalations.
The company has achieved a 100% occupancy rate since its 2018 IPO. This stability comes from its multi-decade lease agreements, most of which are tied to the consumer price index (CPI). As inflation rises, so do Vici’s rents, ensuring steady revenue growth.
One key metric stands out: from 2018 to 2024, Vici’s AFFO per share grew at an 8% CAGR, and it has increased its dividend every year. For 2025, it anticipates another 3%-4% increase in AFFO per share to $2.32-$2.35, which will easily support its forward annual dividend of $1.73 per share.
Comparing the Three REITs
AGNC’s higher yield might tempt some investors, but Realty Income and Vici Properties provide better long-term stability. Below is a comparison of key metrics:
| Metric | AGNC Investment | Realty Income | Vici Properties |
|---|---|---|---|
| Dividend Yield | 14.0% | 5.7% | 5.5% |
| AFFO Growth (CAGR) | – | 5% (10 years) | 8% (6 years) |
| Occupancy Rate | N/A | >96% | 100% |
| Dividend Growth | Uncertain | 130 hikes | Annual hikes |
| Market Cap | $7.5B | $50B | $34B |
Vici’s performance since its IPO is especially notable. Since its market debut in 2018, it has delivered a total return of 124%, far surpassing AGNC’s 30% over the same period. Past performance isn’t always indicative of future results, but these numbers highlight the strength of Realty Income and Vici Properties as more stable, long-term plays for income investors.
