Should You Forget AGNC Investment and Buy Realty Income Instead?
I'm a dividend investor. Like most dividend investors, I am drawn to stocks with high dividend yields. But I've learned the hard way that the highest yield isn't always the best investment option. This is particularly true for those attempting to build an income stream to help support them in retirement.
The risk of investing based only on dividend yield is highlighted by the comparison between 13%-yielding AGNC Investment (NASDAQ: AGNC) and 5.6%-yielding Realty Income (NYSE: O). Here's what you need to know.
Realty Income is one of the largest property-owning real estate investment trusts (REITs) in the world. It focuses on single-tenant properties that are leased out using a net lease structure. A net lease requires the tenant to pay most property-level operating costs. Although any single property is high risk, given there's only one tenant, across a large portfolio, the risk of this approach is quite low. Realty Income owns over 15,500 properties, multiples of most competitors in the net lease niche.
Source Fool.com
