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The Tale Of 2 Net Lease REITs: Realty Income Vs. Store Capital

Jun. 10, 2020 7:00 AM ETRealty Income Corporation (O), STOR102 Comments


  • Triple net lease REITs offer investors exposure to what's likely the highest operating profit margin business in the world.
  • It's important to realize that there's no such thing as a true "apples to apples" comparison in the equity space.
  • In this piece, we'll look at the differences between two of the most followed stocks in our coverage area.
  • This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »

This article was co-produced with Nicholas Ward.

In this day and age, computers account for most of the trading volumes via algorithmic trading and electronically-traded funds. As such, it's easy to view the market as one giant, solid entity.

On most days, the short-term, sentiment-driven tide seems to either lower or lift all boats. Because of this, it's no wonder investors tend to forget the stock market is indeed just that: A market of individual stocks.

Even within the REIT space, people too quickly group competitors as if they're all apples-to-apples comparisons. Yet that doesn't change the fact that they're not.

That's why we'll be looking at the differences between two of the most followed stocks in our coverage area: Realty Income (NYSE:O) and Store Capital (NYSE:STOR).


They're both triple-net lease REITs. Which means they both offer exposure to what's likely the highest operating profit margin business in the world. These companies regularly post margins in the mid-90% range.

This is due to their structure, which passes along the expenses associated with owning/operating a physical structure - including taxes, insurance, and maintenance - to the tenant. These high margins combined with high occupancy rates result in strong cash flows that lead to reliable dividends.

Simply put, the triple net REIT structure is an income-oriented investor's dream. However, even though they follow the same general plans and practices, they're certainly not all created equally.

Old Vs. New

If you've been following us even just as of late, you need no introduction to Realty Income. It's considered a "cult stock" by some because of its large and royal following among the dividend-growth community.

Realty Income went public in 1994 and has provided investors with outstanding market-beating returns since then.


Furthermore, it's become known as "The Monthly Dividend Company," with 598 consecutive months paid

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This article was written by

Brad Thomas profile picture
Leader of iREIT on Alpha
The #1 Service For Safe and Reliable REIT Income

Brad Thomas is the CEO of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 100,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.

The WMR brands include: (1) iREIT on Alpha (Seeking Alpha), and (2) The Dividend Kings (Seeking Alpha), and (3) Wide Moat Research. He is also the editor of The Forbes Real Estate Investor

Thomas has also been featured in Barron's, Forbes Magazine, Kiplinger’s, US News & World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox. 

He is the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 (based on page views) and has over 108,000 followers (on Seeking Alpha). Thomas is also the author of The Intelligent REIT Investor Guide (Wiley) and is writing a new book, REITs For Dummies. 

Thomas received a Bachelor of Science degree in Business/Economics from Presbyterian College and he is married with 5 wonderful kids. He has over 30 years of real estate investing experience and is one of the most prolific writers on Seeking Alpha. To learn more about Brad visit HERE.

Analyst’s Disclosure: I am/we are long O, STOR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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