Realty Income vs Main Street Capital Which Performs Better?

Realty Income and Main Street Capital are two popular investment options in the real estate sector. Realty Income, known as "The Monthly Dividend Company," focuses on acquiring and managing freestanding commercial properties. Main Street Capital, on the other hand, is a business development company that provides debt and equity capital to lower middle-market companies. Both stocks offer attractive dividends and stable returns, making them appealing choices for income-oriented investors looking to diversify their portfolios within the real estate industry.

Realty Income or Main Street Capital?

When comparing Realty Income and Main Street Capital, 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 Main Street Capital.

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 5.51%, while Main Street Capital has a dividend yield of 9.33%. 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, Main Street Capital reports a 5-year dividend growth of 5.33% year and a payout ratio of 110.99%.

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 55.97 and Main Street Capital's P/E ratio at 13.07. 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 1.28 while Main Street Capital's P/B ratio is 1.69.

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 Main Street Capital's is 0.79%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Realty Income's ROE at 2.36% and Main Street Capital's ROE at 13.60%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $55.95 for Realty Income and $51.95 for Main Street Capital. Over the past year, Realty Income's prices ranged from $50.65 to $64.88, with a yearly change of 28.09%. Main Street Capital's prices fluctuated between $40.51 and $52.89, with a yearly change of 30.56%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.