Should You Forget AGNC and Buy These 2 High-Yield REITs Instead?

Core Viewpoint - Realty Income and Vici Properties are suggested as better REIT options for income investors compared to AGNC Investment, which has a high yield but faces declining profitability due to interest rate cuts [1][4]. Group 1: AGNC Investment Overview - AGNC Investment is a mortgage REIT with a significant 14% yield, focusing on originating mortgages and investing in mortgage-backed securities [1]. - The company allocates 89.4% of its $73.3 billion portfolio to agency MBS assets to mitigate housing crisis risks [2]. - In 2024, AGNC's net spread and dollar roll income per share fell 28% to $1.88 due to the Federal Reserve's interest rate cuts [2]. - Analysts predict a further 15% decline in net spread and dollar roll income for 2025, estimating it to drop to $1.60 per share [3]. Group 2: Realty Income Overview - Realty Income is a retail REIT owning approximately 15,600 properties, with major tenants including Dollar General and Walgreens [5]. - The company has maintained an occupancy rate above 96% since its IPO in 1994, indicating resilience despite tenant struggles [6]. - Realty Income has raised its dividend 130 times since 1994, currently offering a forward yield of 5.7% [7]. - From 2014 to 2024, its adjusted funds from operations (AFFO) per share grew at a CAGR of 5%, with expectations for 2025 to reach $4.22-$4.28 per share [8]. Group 3: Vici Properties Overview - Vici Properties is an experiential REIT with a portfolio of 93 casino and entertainment properties, maintaining a 100% occupancy rate since its IPO in 2018 [9]. - The company has locked tenants into long-term leases with rent increases tied to the consumer price index, ensuring rent growth aligns with inflation [9]. - Vici's AFFO per share grew at a CAGR of 8% from 2018 to 2024, with expectations for 2025 to reach $2.32-$2.35 per share [10]. - The forward annual dividend rate is $1.73 per share, resulting in a forward yield of 5.5% [10].