Forget Agree Realty, Buy This Magnificent High-Yield REIT Instead

Core Insights - Agree Realty has significantly expanded its portfolio from 130 properties in 2013 to over 2,100 by Q1 2024, rewarding investors well over the past decade [1] - W.P. Carey is undergoing a portfolio overhaul, which will provide approximately $2.8 billion in investment capacity, allowing for renewed growth [3] - W.P. Carey offers a higher dividend yield of 6.3% compared to Agree Realty's 4.8%, making it potentially more attractive for dividend-focused investors [4][11] Group 1: Company Performance - Over the past 10 years, Agree Realty's dividend has grown at a compound annual rate of roughly 6%, which is considered fast for a net lease REIT [5] - W.P. Carey is in the process of reshaping its portfolio to facilitate faster growth, while Agree's growth may slow down as it is no longer as small as it once was [6] - W.P. Carey's portfolio is diversified across industrial, warehouse, retail, and other categories, unlike Agree's focus on U.S. retail properties [7][16] Group 2: Dividend and Yield Comparison - Agree Realty's dividend yield of 4.8% is attractive but lower than competitors like Realty Income at 5.9% and W.P. Carey at 6.3% [11] - W.P. Carey has started to raise its dividend again after a cut due to its portfolio overhaul, indicating a potential for future growth [12][13] - The worst-case scenario for W.P. Carey post-overhaul is still a higher yield, with expectations of accelerated dividend growth once the overhaul is complete, likely by 2025 [13] Group 3: Market Position and Strategy - Realty Income, the largest net lease REIT, has only increased its dividend by about 3.5% annually, while Agree is expected to continue growing [14] - W.P. Carey generates around 45% of its rents from outside the U.S., providing more avenues for growth compared to Agree's U.S.-focused strategy [16] - W.P. Carey's management plans indicate that the turnaround is progressing as intended, suggesting a faster-growing business in the future [17]