Realty Income vs Agree Realty Which Should You Buy?

Realty Income (NYSE: O) and Agree Realty (NYSE: ADC) are two prominent real estate investment trusts (REITs) known for their strong performance in the commercial real estate sector. Both companies focus on owning and managing a diversified portfolio of properties, including retail, industrial, and office spaces. However, there are notable differences between the two, such as their geographic focus, property types, and tenant diversification. Investors looking for stable income and potential growth opportunities may find value in comparing and analyzing Realty Income and Agree Realty stocks.

Realty Income or Agree Realty?

When comparing Realty Income and Agree Realty, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Realty Income and Agree Realty.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Realty Income has a dividend yield of 5.6%, while Agree Realty has a dividend yield of 4.05%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Realty Income reports a 5-year dividend growth of 3.00% year and a payout ratio of 291.48%. On the other hand, Agree Realty reports a 5-year dividend growth of 6.25% year and a payout ratio of 161.58%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Realty Income P/E ratio at 55.22 and Agree Realty's P/E ratio at 39.11. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Realty Income P/B ratio is 1.26 while Agree Realty's P/B ratio is 1.40.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Realty Income has seen a 5-year revenue growth of 0.28%, while Agree Realty's is 0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Realty Income's ROE at 2.36% and Agree Realty's ROE at 3.65%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $55.69 for Realty Income and $73.61 for Agree Realty. Over the past year, Realty Income's prices ranged from $50.65 to $64.88, with a yearly change of 28.09%. Agree Realty's prices fluctuated between $54.28 and $78.39, with a yearly change of 44.42%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.