DLR vs O: Dividend Yield, Growth & Safety Comparison
Digital Realty Trust, Inc. (DLR) and Realty Income Corporation (O) are both in the Real Estate sector, making them natural rivals for dividend investors. O offers a significantly higher 5.02% yield compared to DLR's 2.83%, a gap of 2.19%. For dividend growth, O leads with a 5-year CAGR of 8.2% versus DLR's 1.3%. Both stocks carry a "Safe" dividend safety rating.
Key Metrics Comparison
| Metric | DLR | O |
|---|
| Dividend Yield | 2.83% | 5.02% |
| Annual Dividend | $4.88 | $3.21 |
| 5-Year CAGR | 1.3% | 8.2% |
| Payout Ratio | 1% | 3% |
| Consecutive Years | 0 | 0 |
| Price | $180.51 | $65.62 |
Yield Comparison
Realty Income Corporation (O) currently yields 5.02%, which is attractive for the broader market. That's 2.19% more than Digital Realty Trust, Inc. (DLR), which yields 2.83%. In dollar terms, O pays $3.21/share annually versus DLR's $4.88/share.
Dividend Growth
Over the past five years, O has grown its dividend at a 8.2% CAGR compared to DLR's 1.3%. DLR: Dividend growth is slowing — the 3-year CAGR of 0.0% trails the 5-year rate of 1.3% and the 10-year rate of 3.7%. O: Dividend growth is accelerating — the 3-year CAGR of 11.4% exceeds the 5-year rate of 8.2% and the 10-year rate of 5.6%.
Dividend Safety
DLR's dividend safety is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.7x. O's dividend safety is rated "Safe." The payout ratio of 3% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.3x. Both have similar payout ratios — DLR at 1% and O at 3%.
Income Comparison
A $10,000 investment in O generates approximately $502/year in dividend income, compared to $283/year from DLR — a difference of $219/year. At $100,000, that gap widens to $2190/year.
Verdict
- Best for income: O
- Best for growth: O
Frequently Asked Questions
Which has a higher dividend yield, DLR or O?
Realty Income Corporation (O) has a higher dividend yield of 5.02% compared to Digital Realty Trust, Inc. (DLR) at 2.83%.
Is DLR or O a better dividend growth stock?
Realty Income Corporation has the stronger dividend growth with a 5-year CAGR of 8.2%, compared to Digital Realty Trust, Inc.'s 1.3%.
Which is safer for dividend income, DLR or O?
Digital Realty Trust, Inc.'s dividend safety is rated "Safe" while Realty Income Corporation is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.7x. The payout ratio of 3% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.3x.
How much income does $10,000 in DLR vs O generate?
A $10,000 investment in DLR generates approximately $283/year in dividends, while the same amount in O generates about $502/year.
Which has a lower payout ratio, DLR or O?
Digital Realty Trust, Inc. has a lower payout ratio of 1% compared to Realty Income Corporation's 3%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
DLR vs O: which is better for retirement income?
It depends on your priorities. O for current income, O for dividend growth. Many retirement investors hold both for diversification.
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