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Realty Income vs. Simon Property: Which REIT Wins the Dividend Battle?

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Key Takeaways

  • Realty Income offers 661 monthly payouts, 30+ years of increases and 98.6% occupancy.
  • Simon Property posted Q2 FFO per share of $3.05, up 4.1%, with occupancy at 96%.
  • SPG raised its dividend to $2.15, up 2.4%, marking 13 increases in the past five years.

Income-focused investors often look to real estate investment trusts (REITs) for steady and growing dividend streams. Two of the largest and most prominent names in the sector — Realty Income Corporation (O - Free Report) and Simon Property Group, Inc. (SPG - Free Report) — offer appealing income profiles supported by substantial real estate portfolios. 

Realty Income is renowned for its monthly dividend and diversified global net-lease portfolio, while Simon stands out as a premier owner of high-end retail, dining and entertainment destinations. Both have proven their ability to generate reliable cash flows, but their business models, growth prospects and dividend characteristics differ in ways that matter to long-term investors. 

Let’s break down the investment case for both, comparing their portfolios, dividend reliability, balance sheets and long-term outlooks, and arrive at a conclusion of which stock to retain and which one to let go.

The Case for Realty Income

Realty Income, known as The Monthly Dividend Company, has established itself as a premier global net-lease REIT with solid dividend consistency, 661 consecutive monthly payouts and more than 30 years of increases. Its portfolio spans 15,600+ properties across all 50 U.S. states, the U.K. and seven other countries in Europe, leased to 1,630 clients in 91 industries, with around 90% of rent derived from non-discretionary, low-price-point or service-oriented tenants. This tenant mix, combined with long-term triple-net leases, underpins predictable rental income and minimizes volatility. Check Realty Income’s dividend history here.

Realty Income’s second-quarter 2025 results reflected its hallmark stability. AFFO per share was $1.05, supported by a 98.6% occupancy rate and rent recapture above 103%. Management noted healthy leasing trends and $1.2 billion investment activity during the quarter, with 76% in Europe, at yields above 7%. Credit ratings of A3/A- and $5.1 billion in liquidity reinforce financial flexibility.

While management has increased its 2025 investment volume guidance to approximately $5 billion and raised the low end of its AFFO per share guidance ($4.24-$4.28 compared with $4.22-$4.28 guided earlier), its outlook incorporates 75 basis points of potential rent loss, higher than its historical experience. A significant portion of this credit loss stems from tenants brought in through M&A deals the company has completed in recent years.

Moreover, for Realty Income, growth is largely acquisition-driven, making performance sensitive to financing conditions. While international diversification reduces U.S. macro risk, it adds exposure to currency fluctuations. Compared with SPG, Realty Income’s earnings profile is more predictable but less leveraged to consumer spending surges. In a strong economy, Simon’s rent and occupancy gains can outpace O’s steady but slower growth.

In short, Realty Income excels in delivering consistent monthly dividends with minimal volatility, making it a solid defensive holding. However, its upside potential is inherently capped relative to Simon’s more economically sensitive portfolio.

The Case for Simon Property Group

Simon Property Group is the behemoth in the U.S. retail REIT industry, owning and operating premier malls, premium outlets and mixed-use properties across North America, Europe and Asia. Its assets consistently attract high foot traffic and strong retailer sales, averaging $736 per square foot over the past 12 months. This portfolio quality drives rental growth, with base rent rising 1.3% year over year to $58.70 per square foot and occupancy climbing to 96% as of the second quarter of 2025. SPG also noted that 30% of second-quarter leasing activity was new deals, and around 90% of its leases expiring through 2025 are complete, which is ahead of this time last year.

In the second quarter, SPG generated Real Estate FFO per share of $3.05, up 4.1% year over year, and raised full-year guidance to $12.45-$12.65 from $12.40-$12.65 guided earlier. Domestic property NOI increased 4.2%, reflecting resilient tenant demand. The company also boosted its quarterly dividend to $2.15, a 2.4% increase from the prior payment, positioning it among the highest-paying REITs in absolute terms. This retail REIT has increased its dividend 13 times in the past five years, and its payout has grown 11.69% over the same period. This spate of dividend increases brings relief to investors and reaffirms confidence in this retail landlord. Check Simon Property’s dividend history here.

SPG’s A-rated balance sheet and $9.2 billion in liquidity support redevelopment projects, selective acquisitions and debt management, such as its recent acquisition of full ownership in Miami’s Brickell City Centre retail and parking facilities, expanding its footprint in a prime market.
 
While SPG offers substantial income and potential for capital appreciation, it carries higher cyclical risk than Realty Income due to reliance on discretionary retail. Consumer spending slowdowns, retail bankruptcies and e-commerce competition pose ongoing challenges.

Compared to Realty Income, SPG delivers a higher nominal dividend and potentially faster growth in favorable market conditions, but with greater volatility. For investors willing to accept cyclical swings, SPG offers a compelling, high-yield play on premium retail real estate.

How Do Estimates Compare for Realty Income & Simon Property?

The Zacks Consensus Estimate for Realty Income’s 2025 sales and funds from operations (FFO) per share implies year-over-year growth of 5.84% and 1.91%, respectively. However, FFO per share estimates for 2025 and 2026 have been trending marginally southward over the past 30 days.

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Image Source: Zacks Investment Research

For Simon Property, the Zacks Consensus Estimate for 2025 sales and FFO per share implies year-over-year growth of 2.62% and a decline of 3.70%, respectively. What is encouraging is that FFO per share estimates for 2025 have moved north over the past week, though the same for 2026 have declined.

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Image Source: Zacks Investment Research

Price Performance and Valuation of O & SPG

Year to date, Realty Income shares have risen 7.5%, while Simon Property stock has declined 4.1%. In comparison, the Zacks REIT and Equity Trust - Retail industry has dropped 9%, while the S&P 500 composite has rallied 8.5% in the same time frame. 

Zacks Investment Research
Image Source: Zacks Investment Research

O is trading at a forward 12-month price-to-FFO, which is a commonly used multiple for valuing retail REITs, of 13.18X, ahead of its one-year median of 13.15X. Meanwhile, SPG is presently trading at a forward 12-month price-to-FFO of 13.00X, which is comfortably below its one-year median of 13.27X.

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Image Source: Zacks Investment Research

Conclusion

Both Realty Income and Simon Property Group are proven dividend performers with disciplined management and strong tenant relationships. Realty Income offers unmatched consistency, ideal for risk-averse investors. However, Simon’s premier assets, redevelopment-driven growth and greater earnings leverage in strong economies position it as the stronger dividend play. 

Given the estimate revisions for O and SPG and valuation, rotating out of Realty Income into SPG could be the more rewarding move for investors seeking a blend of yield and upside and maximizing long-term income growth.

While SPG carries a Zacks Rank #3 (Hold), O has a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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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