Could Agree Realty Become the Next Realty Income?

Core Insights - Realty Income (O) is a dominant player in the net lease sector with a market cap of $50 billion, significantly larger than its competitors [1] - Realty Income focuses on a diversified portfolio, owning over 15,400 properties, while Agree Realty owns around 2,250 properties [1][2] - Realty Income generates approximately 73% of its rents from retail properties, whereas Agree Realty is exclusively focused on retail assets [2] Company Growth and Strategy - The U.S. retail net lease market is estimated at $1.5 trillion, providing ample opportunities for growth, particularly for Agree Realty [3] - Realty Income's size presents challenges for growth, requiring substantial investment activity to expand its business [4] - In Q3 2024, Agree Realty acquired 66 properties, a significant number for them but relatively minor for Realty Income [4][5] Portfolio Diversification - Realty Income generates nearly 30% of its rents from "other" assets, including industrial properties and unique transactions like casinos and vineyards [6] - The company has expanded its portfolio to include European properties and is exploring the establishment of an asset management business [6] Dividend Performance - Agree Realty has shown a higher annualized dividend growth rate of around 6% over the past decade compared to Realty Income's 3% [7] - Realty Income currently offers a higher yield of 5.5% compared to Agree Realty's 4%, but for investors prioritizing growth, Agree Realty may be more appealing [8]