O vs. STAG: Which Monthly Dividend REIT Is Right for You?

Reddit is literally the top result for "O vs STAG." The second result is an Investing.com article from 2015. Both stocks have changed substantially since then — and investors deserve an actual answer.

Here it is.

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Quick Verdict

Realty Income (O) is the stability pick: higher yield, a 30-year consecutive dividend increase streak, blue-chip tenant roster, and S&P 500 membership. You pay a premium for that dependability — and most long-term income investors think it's worth it.

STAG Industrial (STAG) offers a leaner balance sheet, a lower payout ratio, and a concentrated industrial thesis that rides the e-commerce wave. It's a growth-leaning REIT with shorter lease terms that allow rents to reset faster — useful in an inflationary environment.

The real answer: For most portfolios, this isn't an either/or choice. Both pay monthly dividends. Both have their lane. The question is how much of each — and that depends on your investor profile.

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Side-by-Side Comparison (As of Q1 2026, Approximate)

| Metric | O (Realty Income) | STAG (STAG Industrial) | |--------|:-----------------:|:---------------------:| | Share Price | ~$54 | ~$35 | | Dividend Yield | ~5.9% | ~4.2% | | Payout Ratio (% of FFO) | ~76% | ~65% | | P/FFO | ~13.5x | ~14x | | Consecutive Dividend Increases | 30+ years | 13+ years | | Dividend Frequency | Monthly | Monthly | | Property Type | Net lease (diversified) | Industrial (single-tenant) | | Tenant Count | 1,500+ | 500+ | | Debt/EBITDA | ~5.7x | ~5.0x | | S&P 500 Member | ✅ Yes | ❌ No |

Data approximate as of March 2026. Always verify current figures before investing.

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Deep Dive: Realty Income (O)

The Premium Is Earned

Realty Income has been paying monthly dividends since 1969. It has raised its dividend for 30+ consecutive years — through the dot-com bust, the 2008–09 financial crisis, and the COVID pandemic. That streak is not an accident. It's the product of deliberate construction: a portfolio of over 15,000 properties across 90+ industries, leased to tenants operating essential businesses.

What makes O's model durable? Net leases. Under a net lease structure, tenants — not Realty Income — pay property taxes, insurance, and maintenance. O collects rent checks. The company's exposure to tenant operating issues is real, but is partially insulated from the rising cost inputs that squeeze other landlords.

Tenant quality matters too. O's roster includes Walgreens, Dollar General, Dollar Tree, 7-Eleven, FedEx, and Walmart — businesses that have survived recessions because people still need drugstores, dollar stores, and shipping depots regardless of where the economy is heading. No single tenant represents more than 3.5% of revenue.

The S&P 500 Factor

O is one of only a handful of REITs admitted to the S&P 500. That membership matters more than most retail investors realize: it forces index funds to hold O stock, creating structural demand. When passive investing flows surge (as they have for a decade), S&P 500 membership is a quiet tailwind. It also signals institutional credibility — companies have to meet profitability and size thresholds to qualify.

Why O Yields More — But STAG Offers Different Value

At ~5.9%, O's yield exceeds STAG's ~4.2%. The higher yield reflects O's massive scale, diversified tenant base, and decades of dividend consistency — the market prices in reliability and awards it a premium valuation relative to FFO. STAG's lower yield comes with a lower payout ratio (65% vs. O's 75%), shorter lease terms that reset faster with inflation, and a concentrated industrial thesis. You're making a different bet, not a worse one.

The FFO Payout Picture

Realty Income pays out ~76% of its Funds From Operations (FFO) as dividends. FFO is the correct metric for REIT analysis — standard earnings are distorted by depreciation charges that REITs must take but which don't reflect actual cash flow. At 76%, O has a comfortable buffer before any dividend cut would be necessary. FFO per share has grown consistently over the past decade, funding gradual dividend increases without stressing the balance sheet.

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Deep Dive: STAG Industrial (STAG)

The Industrial Thesis

STAG focuses exclusively on single-tenant industrial properties — warehouses, distribution centers, light manufacturing facilities. The portfolio is geographically diversified across secondary and tertiary U.S. markets, where land is cheaper and e-commerce fulfillment infrastructure is being built out.

The tailwind is real: online retail requires approximately 3x more warehouse space than traditional brick-and-mortar retail per dollar of revenue. As e-commerce penetration continues to rise (it's still well below 20% of total U.S. retail), industrial REITs like STAG sit in the path of that secular trend.

Shorter Leases = Rent Reset Opportunity

This is the key distinction from Realty Income's model. STAG's industrial leases typically run 3–7 years, compared to O's net leases which can run 10–20 years. Shorter lease terms are a double-edged sword:

• Upside: When leases roll over in a rising-rent environment, STAG can re-price to current market rates. Industrial rents have risen sharply in major logistics corridors since 2020.
• Downside: In a downturn, short leases mean faster vacancy risk and exposure to falling market rents.

In an inflationary or supply-constrained environment, STAG's lease structure is an asset. In a severe recession with rising vacancies, it's a liability.

The Payout Ratio Advantage

At ~65% of FFO, STAG has a more conservative payout ratio than Realty Income. This gives STAG's management more internal cash flow to fund acquisitions without issuing equity or debt. For a smaller REIT growing its portfolio, that flexibility matters.

STAG's dividend growth rate has been modest — single-digit percentage increases annually — but the lower payout ratio provides runway for continued raises. The company has paid monthly dividends since converting from a quarterly schedule in 2013.

What STAG Lacks

STAG's concentration risk is its main vulnerability. Industrial properties are cyclical. A major slowdown in e-commerce or manufacturing (both plausible given trade uncertainty in 2026) hits STAG harder than O's diversified tenant base. And with 500+ tenants vs. O's 1,500+, a wave of industrial tenant distress would be felt more acutely.

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Graham Number Check: Why P/FFO Is the Right Metric for REITs

Benjamin Graham's original formula — and the Graham Number calculator on this site — is designed for standard equities with book value and EPS as anchors. REITs break both inputs.

REITs are required by law to distribute 90%+ of taxable income, so they retain little capital on their books. Depreciation charges (a non-cash expense) make GAAP earnings look low, inflating P/E ratios artificially. Book value is economically meaningless for a REIT holding real estate.

The correct REIT valuation lens is Price-to-FFO (P/FFO), where FFO strips out depreciation and gains/losses on property sales.

O at ~13.5x P/FFO: Historically, Realty Income has traded at 15–18x FFO during bull markets for dividend stocks. The current 13.5x is in the lower range of its historical band, suggesting O is reasonably valued (not expensive, not screaming cheap) relative to its own history.

STAG at ~14x P/FFO: Slightly above O on this metric, which might seem counterintuitive — O is the premium brand. But STAG's higher growth rate justifies a modest valuation premium. Industrial real estate demand remains robust, and market participants are pricing in continued FFO growth.

Neither is dramatically cheap. But neither is bubble-priced. For income investors buying to hold for 5–10+ years, current entry points for both are acceptable.

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Who Should Buy O?

Profile 1: The Retiree or Near-Retiree You need predictable, reliable income. You cannot afford a dividend cut. O's 30+ year consecutive increase streak, its S&P 500 membership, and its blue-chip tenant roster make it the most bond-like REIT in existence. Own it for certainty.

Profile 2: The Conservative Dividend Growther You want income that compounds slowly but surely. O increases its dividend ~4–5% per year — enough to keep pace with inflation over time. The monthly cadence helps with cash flow planning. You're comfortable accepting a lower starting yield in exchange for durability.

Profile 3: The Dividend Aristocrat Seeker You build portfolios around elite dividend payers with proven streaks. O's peer group includes names like Johnson & Johnson and Coca-Cola — decades of raises, global recognition, institutional ownership. If your screen is "only best-in-class dividend payers," O belongs on the list.

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Who Should Buy STAG?

Profile 1: The Industrial Thesis Investor You believe e-commerce and logistics will keep reshaping supply chains for another decade. STAG is a concentrated bet on warehouse demand — fewer tenants, shorter leases, faster rent resets. O's diversified tenant base is a feature to O investors, but to you it's dilution. You want focused exposure, not a net-lease index fund.

Profile 2: The E-Commerce Infrastructure Bull You believe online retail and logistics automation will continue reshaping the economy for another decade. STAG is a pure play on warehouse demand. You're comfortable with the cyclicality risk and view it as a long-term structural tailwind, not a trade.

Profile 3: The Dividend Growth Optimizer You prioritize lower payout ratios and room for dividend growth over raw starting yield. STAG's 65% FFO payout leaves more room to raise dividends as the portfolio grows. Shorter lease terms mean faster rent reset when the industrial market is strong.

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The Verdict: Both/And for Most Portfolios

Here's the thing: O and STAG are not competing for the same role in your portfolio.

O is your defensive anchor — the position you want to hold when the market is scared. Its long track record and tenant diversification have held up through every major economic dislocation of the past 30 years.

STAG is your industrial growth play — positioned to benefit from e-commerce expansion and rent escalation in secondary markets. Its shorter leases mean faster upside in strong markets and more cyclicality in weak ones.

Owning both gives you monthly income from two different real estate strategies, reducing concentration risk while keeping full exposure to the monthly dividend REIT category.

Example: $10,000 invested equally ($5,000 each)

• O at 5.9% yield → ~$295/year → ~$24.58/month
• STAG at 4.2% yield → ~$210/year → ~$17.50/month
• Combined: ~$505/year in monthly dividend income from two complementary REITs

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Track Both in Your Dividend Dashboard

Want to see how O and STAG fit into your full income portfolio? The Dividend Dashboard lets you track your monthly dividend income across all your holdings, project annual income, and spot diversification gaps.

Also worth checking: the Monthly Dividend Stocks screener has a full list of REITs and other companies that pay monthly — in case you want to build beyond just these two. For valuation screening beyond REITs, the Dividend Aristocrats list shows O's peer group: the elite dividend growers with 25+ consecutive years of increases.

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The Bottom Line

| | O | STAG | |--|:-:|:----:| | Best for stability | ✅ | | | Best for pure e-commerce thesis | | ✅ | | Higher yield | ✅ | | | Lower FFO payout ratio | | ✅ | | Longer dividend track record | ✅ | | | More defensive in downturns | ✅ | | | Rent reset upside in strong markets | | ✅ |

If you can only pick one and prioritize sleep-at-night reliability: O. If you want industrial exposure with room to grow: STAG. If you're building a real portfolio: own both.

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This article is for informational purposes only and does not constitute financial advice. Always do your own research before investing.