Dividend Hunters' Dilemma: NNN REIT vs. Realty Income — Which Top Rated REIT Deserves Your Money?

Why Retail REITs Are Actually Worth Your Attention

Here’s the thing about REITs: they’re legally required to distribute at least 90% of taxable income to shareholders. That means you get paid. A lot.

But retail REITs? They got hammered with doubts. E-commerce was supposed to kill brick-and-mortar. Then came the interest rate shock of 2022-2023. Investors panicked. Turns out, they were wrong. For the first nine months of 2025, retail-focused REITs averaged a 6.9% return according to Nareit. The fear has faded. The opportunity is real.

The Heavyweight: Realty Income’s Massive Scale

Realty Income sits on a portfolio of 15,540-plus properties. It’s basically the Walmart of REITs. About 80% of rent comes from retail — grocery stores (11%), convenience stores (10%), home improvement, and dollar stores make up the bulk. The remaining 20% spreads across industrial, gaming, and other assets.

The numbers? Solid. A 98.7% occupancy rate means tenants are sticking around. When leases renew, Realty Income bumps the rent up 3.5%. That’s leverage. Adjusted funds from operations (AFFO) — the cash REITs can actually distribute — hit $1.09 per diluted share, up 2.9% year-over-year.

The dividend is the star. Monthly payments, increased quarterly for over 30 years straight. Most recent bump? October brought it from $0.269 to $0.2695 per share. With projected 2025 AFFO at $4.25-$4.27 per share against $3.23 in annualized dividends, you’re looking at a comfortable 5.7% yield backed by actual cash flow.

The catch? When you own 15,000 properties, finding deals that meaningfully boost growth gets tough. Realty Income is a slow-and-steady wealth builder, not a rocket ship.

The Nimble Challenger: NNN REIT’s Focused Strategy

NNN REIT plays a different game. It owns roughly 3,700 properties leased to retailers across convenience stores, automotive, restaurants, and entertainment venues. Fewer properties, but strategically chosen across diversified retail segments.

Management keeps tenants happy — 97.5% occupancy in Q3 proves it. AFFO per share climbed from $0.84 to $0.86 last quarter. The dividend? Raised for 36 consecutive years. August’s increase of 3.4% to $0.60 per share shows NNN isn’t slowing down.

With projected AFFO hitting $3.41-$3.45 per share against the new dividend rate, coverage is more than adequate. The yield? 5.9% — slightly higher than Realty Income.

Here’s where NNN shines: its smaller scale is a feature, not a bug. New property acquisitions can still meaningfully move the growth dial. For investors seeking capital appreciation alongside dividends, that matters.

The Real Difference: Growth vs. Stability

Both are top rated REITs with enviable track records in a sector that many wrote off. Both have raised dividends for 30+ years. Both yield in the 5.7-5.9% range. The yields are nearly identical.

So what separates them?

Realty Income offers fortress-like stability. It’s the established player, diversified across property types and geographies. Growth will be modest, but predictable.

NNN REIT offers the potential for superior returns. Smaller, more focused, still expanding meaningfully with each new property deal. You get the dividend income plus the possibility of real capital gains.

The decision hinges on your timeline and risk appetite. Want steady, reliable income with minimal drama? Realty Income. Want income plus meaningful growth potential? NNN REIT’s smaller footprint makes each strategic acquisition matter more to shareholders.

In a market obsessed with AI and mega-cap tech, these top rated REITs remind you that boring businesses — ones that pay you monthly while you sleep — have their own kind of magic.