O vs VZ: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | O | VZ |
|---|
| Dividend Yield | 5.02% | 5.77% |
| Annual Dividend | $3.21 | $2.73 |
| 5-Year CAGR | 8.2% | 9.5% |
| Payout Ratio | 3% | 50% |
| Consecutive Years | 0 | 0 |
| Price | $65.62 | $49.07 |
Yield Comparison
Verizon Communications Inc (VZ) currently yields 5.77%, which is attractive for the broader market. That's 0.76% more than Realty Income Corporation (O), which yields 5.02%. In dollar terms, VZ pays $2.73/share annually versus O's $3.21/share.
Dividend Growth
Over the past five years, VZ has grown its dividend at a 9.5% CAGR compared to O's 8.2%. 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'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. VZ's dividend safety is rated "Safe." The payout ratio of 50% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.5x. O's payout ratio of 3% is more conservative than VZ's 50%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in VZ generates approximately $577/year in dividend income, compared to $502/year from O — a difference of $75/year. At $100,000, that gap widens to $750/year.
Verdict
- Best for income: VZ
- Best for growth: VZ
- Best for safety: O
Frequently Asked Questions
Which has a higher dividend yield, O or VZ?
Verizon Communications Inc (VZ) has a higher dividend yield of 5.77% compared to Realty Income Corporation (O) at 5.02%.
Is O or VZ a better dividend growth stock?
Verizon Communications Inc has the stronger dividend growth with a 5-year CAGR of 9.5%, compared to Realty Income Corporation's 8.2%.
Which is safer for dividend income, O or VZ?
Realty Income Corporation's dividend safety is rated "Safe" while Verizon Communications Inc is rated "Safe." The payout ratio of 3% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.3x. The payout ratio of 50% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.5x.
How much income does $10,000 in O vs VZ generate?
A $10,000 investment in O generates approximately $502/year in dividends, while the same amount in VZ generates about $577/year.
Which has a lower payout ratio, O or VZ?
Realty Income Corporation has a lower payout ratio of 3% compared to Verizon Communications Inc's 50%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
O vs VZ: which is better for retirement income?
It depends on your priorities. VZ for current income, VZ for dividend growth, O for safety. Many retirement investors hold both for diversification.
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