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O vs. REG: Which Retail REIT Offers More Resilient Income?
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Key Takeaways
Realty Income owns 15,600 global net lease assets and has raised dividends for 30 consecutive years.
Regency Centers operates 480 U.S. grocery-anchored centers with more than 96% same-property lease rates.
O delivers a 5.61% dividend yield with 98.5% occupancy, while REG offers a lower yield.
In the current market landscape, where economic uncertainty and evolving retail dynamics challenge investors, real estate investment trusts (REITs) with exposure to necessity-based retail are increasingly viewed as defensive income plays. Among them, Realty Income (O - Free Report) and Regency Centers (REG - Free Report) stand out for their scale, quality and income-generating capabilities.
Both companies target tenants with essential, low-discretionary consumer demand, yet their strategies differ significantly. Realty Income focuses on single-tenant net lease properties globally, while Regency Centers specializes in open-air, grocery-anchored shopping centers.
Amid ongoing tariff uncertainties, fiscal challenges and market volatility, steady dividend income remains a key draw for income-oriented investors. Against this backdrop, we assess the strengths and weaknesses of both REITs to determine which one offers a more reliable income stream in the long run.
The Case for Realty Income
Realty Income, known as "The Monthly Dividend Company," has delivered 30 consecutive years of dividend increases and boasts a diversified portfolio of more than 15,600 properties in all 50 U.S. states, the U.K. and six other countries in Europe. The company focuses primarily on single-tenant, triple-net leased assets, with tenants bearing operating costs, property taxes and capital expenditures, resulting in a 95% EBITDA margin.
Approximately 91% of its rent comes from tenants operating in industries resilient to economic cycles or e-commerce threats, including dollar stores, pharmacies, convenience retail and grocery. Moreover, Realty Income has expanded into high-growth areas like data centers and gaming, with transactions including Encore Boston Harbor and a partnership with Digital Realty.
The company’s solid investment-grade tenant base and 98.5% occupancy underscore its reliability. It has also consistently delivered positive operational returns for 29 consecutive years and grown adjusted funds from operations (AFFO) per share by a median of 5.5% annually since 1996. Moreover, Realty Income is well-poised for long-term growth with a global net lease addressable market estimated at $14 trillion and recent expansion into Europe.
Supported by strong financials, investment-grade credit ratings (A3/A-), a 5.61% dividend yield and a history of consistent payouts, Realty Income remains a dependable option for income investors. This member of the S&P 500 Dividend Aristocrats has made 111 straight quarterly increases. Its latest and 131st dividend hike since its 1994 NYSE debut is payable on July 15 to shareholders of record as of July 1.
That said, Realty Income's retail-focused portfolio carries some vulnerability to tariff issues and tenant bankruptcies. Moreover, its sensitivity to interest rates and substantial debt load, totaling $27.6 billion, are notable risks in a high-rate environment. In the first quarter of 2025, interest expenses rose 11.5% year over year.
The Case for Regency Centers
Regency Centers stands out as a leading owner, operator and developer of open-air shopping centers with a strategic focus on grocery-anchored retail. Around 85% of its properties are anchored by top-performing grocers, which benefit from high foot traffic, essential consumer demand and relatively low e-commerce disruption. This necessity-driven model offers a strong degree of income stability, especially during economic downturns when consumers prioritize value and convenience.
The REIT’s portfolio of more than 480 properties is concentrated in affluent suburban markets with favorable demographics and limited retail supply. This geographic positioning supports long-term tenant performance and rent growth. Additionally, Regency’s proactive asset management approach, executed through a decentralized network of 20+ regional offices, strengthens tenant relationships and enables responsive, localized decision-making. This enhances operational efficiency and occupancy durability, with same-property leased rates exceeding 96%.
Regency also maintains a robust development and redevelopment pipeline, with approximately $500 million in active projects. This long-term value creation strategy aims to generate yields at least 150 basis points above private market cap rates, positioning the REIT for accretive growth. By reinvesting in high-performing assets and leveraging tenant demand for well-located space, Regency enhances both income and asset value over time.
Financially, the REIT maintains sector-leading credit ratings (A3/A-), low leverage and substantial liquidity with $1.2 billion of revolver availability. Given the company’s solid operating platform, scope for growth and decent financial position compared to the industry, Regency also remains a dependable option for income investors. From 2014 to the fourth quarter of 2024, the company’s dividend witnessed a CAGR of 3.7%. In the last five years, REG has increased its dividend four times, and it currently has a dividend yield of 4.05%.
However, growing e-commerce adoption and efforts of online retailers to go deeper into the grocery business raise concerns. Moreover, Regency is more exposed to co-tenancy risks and operational costs associated with multi-tenant properties. Unlike Realty Income’s net lease model, Regency bears the burden of property expenses and capital expenditures, which may compress margins in a downturn. Additionally, its domestic focus may limit long-term growth opportunities compared to Realty Income’s global footprint.
How Do Estimates Compare for Realty Income & Regency?
The Zacks Consensus Estimate for Realty Income’s 2025 sales and FFO per share implies year-over-year growth of 6.4% and 2.4%, respectively. Also, FFO per share estimates for 2025 and 2026 have been revised marginally northward over the past week. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
For Realty Income:
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Regency Centers’ 2025 sales and FFO per share implies year-over-year growth of 5.5% and 5.6%, respectively. However, FFO per share estimates for 2025 have remained unchanged over the past 60 days, though the same for 2026 have been revised a cent upward over the past week.
For Regency Centers:
Image Source: Zacks Investment Research
Price Performance and Valuation of O & REG
Year to date, Realty Income shares have risen 7.6%, while Regency Centers stock has declined 5.9%. In comparison, the Zacks REIT and Equity Trust - Retail industry has been down 8.5%, while the S&P 500 composite has risen 5.3% in the same time frame.
Image Source: Zacks Investment Research
O is trading at a forward 12-month price-to-FFO, which is a commonly used multiple for valuing REITs, of 13.21X, at par with its one-year median but below the retail REIT industry’s 14.66X. Meanwhile, REG is presently trading slightly above, at a forward 12-month price-to-FFO of 14.99X. Both O and REG carry a Value Score of D.
In a market defined by economic uncertainty and shifting retail trends, Realty Income and Regency Centers both appeal to income-focused investors through their exposure to essential retail tenants.
Realty Income operates a globally diversified portfolio of more than 15,600, mostly single-tenant, triple-net leased properties, generating highly stable cash flows and boasting 30 years of consecutive dividend growth. Regency Centers, by contrast, focuses on U.S.-based, grocery-anchored open-air shopping centers, which also provide income resilience but come with higher operational complexity. While both REITs offer compelling fundamentals, Realty Income’s global scale, lease simplicity and dividend consistency make it the more reliable stock for long-term income.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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O vs. REG: Which Retail REIT Offers More Resilient Income?
Key Takeaways
In the current market landscape, where economic uncertainty and evolving retail dynamics challenge investors, real estate investment trusts (REITs) with exposure to necessity-based retail are increasingly viewed as defensive income plays. Among them, Realty Income (O - Free Report) and Regency Centers (REG - Free Report) stand out for their scale, quality and income-generating capabilities.
Both companies target tenants with essential, low-discretionary consumer demand, yet their strategies differ significantly. Realty Income focuses on single-tenant net lease properties globally, while Regency Centers specializes in open-air, grocery-anchored shopping centers.
Amid ongoing tariff uncertainties, fiscal challenges and market volatility, steady dividend income remains a key draw for income-oriented investors. Against this backdrop, we assess the strengths and weaknesses of both REITs to determine which one offers a more reliable income stream in the long run.
The Case for Realty Income
Realty Income, known as "The Monthly Dividend Company," has delivered 30 consecutive years of dividend increases and boasts a diversified portfolio of more than 15,600 properties in all 50 U.S. states, the U.K. and six other countries in Europe. The company focuses primarily on single-tenant, triple-net leased assets, with tenants bearing operating costs, property taxes and capital expenditures, resulting in a 95% EBITDA margin.
Approximately 91% of its rent comes from tenants operating in industries resilient to economic cycles or e-commerce threats, including dollar stores, pharmacies, convenience retail and grocery. Moreover, Realty Income has expanded into high-growth areas like data centers and gaming, with transactions including Encore Boston Harbor and a partnership with Digital Realty.
The company’s solid investment-grade tenant base and 98.5% occupancy underscore its reliability. It has also consistently delivered positive operational returns for 29 consecutive years and grown adjusted funds from operations (AFFO) per share by a median of 5.5% annually since 1996. Moreover, Realty Income is well-poised for long-term growth with a global net lease addressable market estimated at $14 trillion and recent expansion into Europe.
Supported by strong financials, investment-grade credit ratings (A3/A-), a 5.61% dividend yield and a history of consistent payouts, Realty Income remains a dependable option for income investors. This member of the S&P 500 Dividend Aristocrats has made 111 straight quarterly increases. Its latest and 131st dividend hike since its 1994 NYSE debut is payable on July 15 to shareholders of record as of July 1.
That said, Realty Income's retail-focused portfolio carries some vulnerability to tariff issues and tenant bankruptcies. Moreover, its sensitivity to interest rates and substantial debt load, totaling $27.6 billion, are notable risks in a high-rate environment. In the first quarter of 2025, interest expenses rose 11.5% year over year.
The Case for Regency Centers
Regency Centers stands out as a leading owner, operator and developer of open-air shopping centers with a strategic focus on grocery-anchored retail. Around 85% of its properties are anchored by top-performing grocers, which benefit from high foot traffic, essential consumer demand and relatively low e-commerce disruption. This necessity-driven model offers a strong degree of income stability, especially during economic downturns when consumers prioritize value and convenience.
The REIT’s portfolio of more than 480 properties is concentrated in affluent suburban markets with favorable demographics and limited retail supply. This geographic positioning supports long-term tenant performance and rent growth. Additionally, Regency’s proactive asset management approach, executed through a decentralized network of 20+ regional offices, strengthens tenant relationships and enables responsive, localized decision-making. This enhances operational efficiency and occupancy durability, with same-property leased rates exceeding 96%.
Regency also maintains a robust development and redevelopment pipeline, with approximately $500 million in active projects. This long-term value creation strategy aims to generate yields at least 150 basis points above private market cap rates, positioning the REIT for accretive growth. By reinvesting in high-performing assets and leveraging tenant demand for well-located space, Regency enhances both income and asset value over time.
Financially, the REIT maintains sector-leading credit ratings (A3/A-), low leverage and substantial liquidity with $1.2 billion of revolver availability. Given the company’s solid operating platform, scope for growth and decent financial position compared to the industry, Regency also remains a dependable option for income investors. From 2014 to the fourth quarter of 2024, the company’s dividend witnessed a CAGR of 3.7%. In the last five years, REG has increased its dividend four times, and it currently has a dividend yield of 4.05%.
However, growing e-commerce adoption and efforts of online retailers to go deeper into the grocery business raise concerns. Moreover, Regency is more exposed to co-tenancy risks and operational costs associated with multi-tenant properties. Unlike Realty Income’s net lease model, Regency bears the burden of property expenses and capital expenditures, which may compress margins in a downturn. Additionally, its domestic focus may limit long-term growth opportunities compared to Realty Income’s global footprint.
How Do Estimates Compare for Realty Income & Regency?
The Zacks Consensus Estimate for Realty Income’s 2025 sales and FFO per share implies year-over-year growth of 6.4% and 2.4%, respectively. Also, FFO per share estimates for 2025 and 2026 have been revised marginally northward over the past week. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
For Realty Income:
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Regency Centers’ 2025 sales and FFO per share implies year-over-year growth of 5.5% and 5.6%, respectively. However, FFO per share estimates for 2025 have remained unchanged over the past 60 days, though the same for 2026 have been revised a cent upward over the past week.
For Regency Centers:
Image Source: Zacks Investment Research
Price Performance and Valuation of O & REG
Year to date, Realty Income shares have risen 7.6%, while Regency Centers stock has declined 5.9%. In comparison, the Zacks REIT and Equity Trust - Retail industry has been down 8.5%, while the S&P 500 composite has risen 5.3% in the same time frame.
Image Source: Zacks Investment Research
O is trading at a forward 12-month price-to-FFO, which is a commonly used multiple for valuing REITs, of 13.21X, at par with its one-year median but below the retail REIT industry’s 14.66X. Meanwhile, REG is presently trading slightly above, at a forward 12-month price-to-FFO of 14.99X. Both O and REG carry a Value Score of D.
Image Source: Zacks Investment Research
O or REG: Which Is a Better Pick?
Both Realty Income & Regency Centers have a Zacks Rank #3 (Hold), which makes choosing one stock a difficult task. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In a market defined by economic uncertainty and shifting retail trends, Realty Income and Regency Centers both appeal to income-focused investors through their exposure to essential retail tenants.
Realty Income operates a globally diversified portfolio of more than 15,600, mostly single-tenant, triple-net leased properties, generating highly stable cash flows and boasting 30 years of consecutive dividend growth. Regency Centers, by contrast, focuses on U.S.-based, grocery-anchored open-air shopping centers, which also provide income resilience but come with higher operational complexity. While both REITs offer compelling fundamentals, Realty Income’s global scale, lease simplicity and dividend consistency make it the more reliable stock for long-term income.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.