The Motley Foolยท2025-05-29 07:57Core Viewpoint - Investors are attracted to ultra-high-yield stocks, but such yields often indicate concerns about future cash flows and sustainability of dividends [1] Group 1: Realty Income - Realty Income has a diversified portfolio of over 15,600 buildings across the U.S. and nine European countries as of March 2025 [5] - The company has consistently raised its monthly dividend payout every quarter since going public in 1994, resulting in a 46% increase over the past decade, leading to a current yield of 5.7% [6][9] - Realty Income's business model relies on net leases, which provide predictable cash flows due to tenants covering variable expenses and long-term lease agreements [7] - The company can borrow at lower interest rates compared to peers, exemplified by a recent $600 million raise at 5.125%, only slightly above current Treasury rates [8] - Realty Income's large addressable market and access to cheap capital suggest potential for continued dividend increases [9] Group 2: NNN REIT - NNN REIT operates a portfolio of 3,641 buildings, all located in the U.S., with a diverse tenant base where the largest tenant accounts for only 4.5% of annual rent [10][11] - The company has raised its quarterly dividend for 35 consecutive years, with a 33% increase over the past decade, currently offering a 5.6% dividend yield [12] - In the first quarter, NNN REIT's funds from operations (FFO) grew 3.6% year over year to $0.85 per share, supporting its quarterly dividend payout of $0.58 per share [13]