Quick Read
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Realty Income yields 5.72% with 673 consecutive monthly dividends, while W. P. Carey's 95% fixed-rate debt at 3.2% is a clear edge with the 10-year near 5%.
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NNN REIT leads the group with a 6.05% yield and 37 straight years of dividend increases, while Essential Properties retains the most cash at just 64% AFFO payout.
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Long-term rates have backed off. The 10-year Treasury yield closed at 4.98% on October 29, 2026, down from its October high of 5.31% on October 5. That is a drop of 0.33 percentage points. This matters most for net-lease REITs. These landlords buy single-tenant buildings, sign long leases that make the tenant pay taxes, insurance, and maintenance, and fund much of that buying with debt. When long-term yields fall, their borrowing costs ease and their dividends look better next to Treasuries. That pushes their share prices up. None of that means rates will keep falling. The 10-year is still near 5%, and the five REITs below need to earn their keep at today's rates. All five are equity REITsthat own physical property and collect rent. None is a mortgage REIT. Dividend safety for each one is measured by adjusted funds from operations (AFFO)coverage, the cash-flow measure REITs use. The GAAP earnings payout ratio is the wrong tool for this job.
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| REIT |
Price (Oct. 30) |
Annualized Dividend |
Forward Yield |
Latest AFFO/Share |
|---|---|---|---|---|
| Realty Income (O) |
$56.94 |
$3.258 |
5.72% |
$1.09 (Q2) |
| W. P. Carey (WPC) |
$64.11 |
$3.80 |
5.93% |
$1.33 (Q3) |
| Agree Realty (ADC) |
$67.07 |
$3.252 |
4.85% |
$1.14 (Q2) |
| NNN REIT (NNN) |
$41.01 |
$2.48 |
6.05% |
$0.90 (Q2) |
| Essential Properties (EPRT) |
$26.74 |
$1.28 |
4.79% |
$0.51 (Q3) |
The table holds a second story. Two of these REITs, Agree and Essential Properties, yield less than the 10-year Treasury. Investors in those two are paying for dividend growth and balance-sheet quality instead of current income. The highest yielder, NNN, gets its extra yield from a slower-growth tenant mix.
Realty Income Pays Every Month and Is Moving Into Data Centers
Realty Income( NYSE:O ) owns or holds interests in over 15,500 properties leased to 1,798 clients in 92 industries. Retail accounts for 78.3% of annualized base rent and industrial for 16.2%. Occupancy was 98.8% in Q2, same-store rental revenue grew 1.2%, and re-leased properties recaptured 102.7% of prior rent.
Yield and coverage:At the current price, the forward yield is about 5.72%. Q2 dividends totaled $0.8115 per share against AFFO of $1.09, an AFFO payout of roughly 74%. That is the thinnest cushion in this group, though it is adequate for a company with an "A" rating from Fitch. The monthly payment rose to $0.2715 with the October declaration, payable November 13, 2026. The company has recorded 673 consecutive monthly dividends.
Balance sheet:Net debt runs at 5.4x annualized pro forma adjusted EBITDA, and the revolver was expanded to $5.5 billion.
Bull case:Management raised 2026 AFFO guidance to $4.44 to $4.45 per share and investment volume guidance to $10.0 billion. Q2 investments came in at a 7.3% initial cash yield, and a $6 billion hyperscale data center joint venture adds a new growth leg. Shares are up 5.56% year to date.
Risk:Only 34.3% of base rent comes from investment-grade clients, which leaves 65.7% with sub-investment-grade tenants. Q2 still included $54.2 million of real estate impairments.
W. P. Carey Has the Fastest AFFO Growth and Inflation-Linked Rents
W. P. Carey( NYSE:WPC ) owns 1,755 net lease properties leased to 383 tenants. Industrial and warehouse make up 39% and 25% of base rent, and retail just 22%. Occupancy was 98.6% as of September 30, and the weighted-average lease term was 12.0 years. Contractual same-store rent grew 2.6% in constant currency, the best in this group, because 47.8% of base rent is tied to CPI escalators.
Yield and coverage:The forward yield is about 5.93%. The Q3 dividend of $0.950 against AFFO of $1.33 works out to roughly 71% AFFO coverage. The dividend has gone up every quarter, from $0.88 at the end of 2024 to $0.95 now.
Balance sheet:About 95% of debt is fixed-rate at a weighted average of 3.2%, and net debt to adjusted EBITDA is 5.5x (5.1x pro forma). That cheap debt is a real advantage while the 10-year sits near 5%. The company also refinanced maturing 4.250% notes with new 5.200% notes due 2036, which shows what refinancing costs today.
Bull case:Q3 AFFO rose to $1.33 from $1.25, and 2026 guidance was raised to $5.23-$5.29, implying 5.8% growth at the midpoint. Year-to-date investments of $1.6 billion came in at a 7.5% going-in cap rate.
Risk:Europe accounts for 33% of base rent, which brings currency exposure. The company's Lineage stake also produced a $35.8 million unrealized loss in Q3.
Agree Realty Has the Strongest Tenant Roster and Recently Raised Its Payout
Agree Realty( NYSE:ADC ) owns 2,825 properties across all 50 states and D.C., leased to retailers such as Walmart, Tractor Supply, Dollar General, O'Reilly Auto Parts, and Kroger. About 65.8% of base rent comes from investment-grade tenants. Occupancy is 99.8%, re-leasing recaptured 105% of prior rent, and same-store rent grew a modest 0.9%.
Yield and coverage:The forward yield is about 4.85%. Three months at the Q2 rate of $0.267 against Q2 AFFO of $1.14 gives roughly 70% AFFO coverage. The October declaration lifted the monthly payment to $0.271, part of a run of 172 consecutive common dividends.
Balance sheet:Net debt to recurring EBITDA is 5.2x, or 3.7x pro forma for unsettled forward equity. Liquidity stands at $1.9 billion, with issuer ratings of A- from Fitch.
Bull case:AFFO per share grew 7.4% in Q2, and record quarterly investment of about $502 million came in at a 7.0% cap rate. Walgreens exposure has been cut below 1%.
Risk:Interest expense climbed to $40.3 million from $32.3 million, and $497 million of commercial paper floats with short-term rates. The stock is down 3.47% year to date, suggesting a below-Treasury yield is a hard sell right now.
NNN REIT Is the Ultra-High-Yield Name, With 37 Years of Raises
NNN REIT( NYSE:NNN ) owns single-tenant, freestanding retail and service properties. Its largest categories are automotive service at 18.6% of base rent, convenience stores at 15.9%, and restaurants at 14.0%, with tenants including 7-Eleven, Mister Car Wash, and Dave & Buster's. Occupancy rose to 99.1%, up 110 bps year over year, and the weighted-average lease term is 10.1 years.
Yield and coverage:At a forward yield of about 6.05%, NNN is the only ultra-high-yield name on this list. Coverage backs it up. The Q2 payout was about 67% of AFFO, and the dividend was raised to $0.62 quarterly. That raise marked the company's 37th consecutive annual dividend increase.
Balance sheet:Only 2.5% of debt is floating-rate, and the company negotiated lower SOFR-based margins on its term loan and revolver. The model is mostly self-funded.
Bull case:2026 AFFO guidance was raised to $3.55 to $3.59, and acquisition guidance rose to $700 to $800 million. Q2 deals carried a 7.3% initial cash cap rate with a 17.9-year lease term. The shares lead this group, up 9.4% year to date.
Risk:Interest expense rose to $53.5 million from $49.3 million, and Q2 included an $8.1 million impairment. Entertainment and theaters together add discretionary-spending exposure.
Essential Properties Pays Out the Least of Its AFFO and Has the Longest Leases
Essential Properties Realty Trust( NYSE:EPRT ) owns 2,580 freestanding properties leased to middle-market service and experience businesses. Those include early childhood education, car washes, quick-service restaurants, fitness, and automotive service. Occupancy is 99.6%, the weighted-average lease term is 14.2 years, and tenants generate 3.5x unit-level rent coverage. In other words, their store-level profits cover rent several times over. Same-store rent grew 1.4%.
Yield and coverage:The forward yield is about 4.79%. The payout is roughly 64% of AFFO, the lowest here, which leaves about $170 million in annual free cash flow to reinvest. The quarterly dividend is $0.32, up from $0.30 a year earlier.
Balance sheet:The revolver was upsized to $1.3 billion, and $482.8 million of unsettled forward equity is available to fund deals.
Bull case:Q3 AFFO per share grew 6% to $0.51. Q3 investments of $342.2 million carried a 7.7% cash cap rate, the richest in this group, and initial 2027 AFFO guidance of $2.10 to $2.18 sits above the raised 2026 range of $2.02 to $2.05.
Risk:Q3 impairments jumped to $15.0 million from $1.4 million, a reminder that middle-market tenants carry more credit risk than investment-grade retailers. The stock is down 6.77% year to date.
What Income Investors Should Watch Next
All five REITs cover their dividends with AFFO, with payouts ranging from about 64% to 74%. All five also raised their outlooks this year. NNN offers the most income today, while W. P. Carey has the fastest AFFO growth and the cheapest debt. Essential Properties keeps the most cash after paying its dividend, and Agree has the strongest tenant credit. If the 10-year moves back toward its 5.31% October high, watch interest expense and acquisition spreads in the next earnings reports.
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