Here's My Top Dividend Stock for 2026

W.P. Carey's 2023 dividend cut, executed to facilitate its exit from the office property sector, is proving strategically beneficial, positioning the net lease REIT for accelerated growth relative to Realty Income. Post-repositioning, W.P. Carey reported a 5.9% increase in adjusted FFO per share for Q3 2025 and 6% for the first nine months, significantly outperforming Realty Income's 2.9% and 1.6% growth, respectively. This strategic shift towards industrial, warehouse, and retail assets, combined with its smaller market capitalization, indicates W.P. Carey offers a higher growth trajectory for dividend investors, despite a slightly lower current yield than its larger peer.

Analysis

W.P. Carey (NYSE: WPC) strategically repositioned itself in 2023 by cutting its dividend to exit the office property sector, a move that has since facilitated accelerated growth. This restructuring, involving the sale of a large portion of its portfolio, enabled a renewed focus on industrial, warehouse, and retail assets. The company's adjusted Funds From Operations (FFO) per share increased by 5.9% in Q3 2025 and 6% for the first nine months of 2025, demonstrating the positive impact of this shift.

In contrast, Realty Income (NYSE: O), the larger net lease REIT bellwether with a $52 billion market cap, exhibited slower growth, with adjusted FFO per share rising 2.9% in Q3 2025 and 1.6% for the first nine months. WPC's smaller market capitalization of $14.5 billion allows for more significant impact from new investments, contributing to its superior growth rates. This divergence highlights WPC's transformation into a faster-growing entity within the REIT sector.

WPC's dividend growth also outpaced O, with a 4% year-over-year increase in Q3 2025 compared to O's 2.3%. Despite WPC's current dividend yield of 5.4% being slightly lower than O's 5.7%, its higher FFO and dividend growth rates suggest a more compelling long-term dividend growth profile. The article projects these trends to continue, positioning WPC as a potentially more dynamic dividend stock for 2026 and beyond.

Key Decisions for Investors

• Investors seeking higher growth potential within the net lease REIT sector should evaluate W.P. Carey (WPC) given its significantly faster adjusted FFO and dividend growth post-strategic repositioning.
• Realty Income (O) remains a foundational dividend investment, suitable for investors prioritizing stability and consistent income due to its size, dividend history, and higher current yield.
• Consider a diversified approach by holding both WPC for its growth trajectory and O for its foundational stability, balancing income and capital appreciation within the net lease REIT segment.
• Closely monitor WPC's sustained FFO and dividend growth rates, as continued outperformance against larger peers will be crucial for validating its long-term investment thesis.