O vs VZ: Dividend Comparison
Dividend data as of
Realty Income Corporation (O) from Real Estate and Verizon Communications Inc (VZ) from Communication Services offer different dividend profiles for income-focused portfolios. VZ edges ahead on yield at 5.77% versus O's 5.02%. For dividend growth, VZ leads with a 5-year CAGR of 9.5% versus O's 8.2%. Both stocks carry a "Safe" dividend safety rating.
Verdict
Yield Analysis
VZ yields 0.76% more than O. In dollar terms, O pays $3.21/share vs VZ's $2.73/share annually.
Dividend Growth
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%.
VZ: Dividend growth is accelerating — the 3-year CAGR of 17.6% exceeds the 5-year rate of 9.5% and the 10-year rate of 5.3%.
Dividend Safety
O: The payout ratio of 3% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.3x.
VZ: The payout ratio of 50% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.5x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in O vs VZ today?
At $65.62 per share, $10,000 buys about 152.4 shares of Realty Income Corporation (O). Each share pays $3.21 per year in dividends, so the position starts out generating roughly $488 per year — about $41 a month.
At $49.07 per share, $10,000 buys about 203.8 shares of Verizon Communications Inc (VZ). Each share pays $2.73 per year in dividends, so the position starts out generating roughly $557 per year — about $46 a month.
VZ is the larger income stream from day one: $69 per year more on the same $10,000 invested.
What could $10,000 of O or VZ income look like in 10 years?
Realty Income Corporation (O) has raised its dividend about 8.2% a year over the past five years. If that pace held, the $502 per year that $10,000 generates today at the current 5.02% yield would reach $1,102 per year by 2036 — a 11.0% yield on the original cost.
Verizon Communications Inc (VZ) has raised its dividend about 9.5% a year over the past five years. If that pace held, the $577 per year that $10,000 generates today at the current 5.77% yield would reach $1,428 per year by 2036 — a 14.3% yield on the original cost.
On those trailing rates, VZ pays more in 2036: $1,428 versus $1,102 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would O's dividend growth overtake VZ's higher yield?
It doesn't, on the trailing numbers. Verizon Communications Inc (VZ) yields more today (5.77% vs 5.02%) and has also grown its dividend at least as fast (9.5% vs 8.2% a year over five years). Unless O accelerates its raises or VZ stumbles, O never closes the income gap — VZ wins on both current income and growth.
Can O and VZ afford their dividends?
Realty Income Corporation (O) earns $1.07 per share against $3.21 paid out in dividends — 0.3x coverage (a 3% payout ratio).
Verizon Communications Inc (VZ) earns $4.06 per share against $2.73 paid out in dividends — 1.5x coverage (a 50% payout ratio).
VZ's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for O if earnings weaken.
Which fits an early-retirement income portfolio better, O or VZ?
For income you need right now, Verizon Communications Inc (VZ) leads: $100,000 invested today pays about $481 a month at the current 5.77% yield, versus $418 a month from Realty Income Corporation (O) at 5.02%.
VZ also leads on dividend growth (9.5% vs 8.2% a year over five years), so the trailing numbers favor it on both fronts.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $1,798/yr in O vs $2,502/yr in VZ by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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