Large yields are enticing for dividend investors, so much so that they can cause people to make bad long-term decisions to collect large near-term dividend checks. That is why it is so illuminating to compare Realty Income (NYSE: O) and Annaly Capital (NYSE: NLY). In the end, the real estate investment trust (REIT) with the lower yield has been the bigger winner.

Realty Income offers a dividend yield of roughly 4.5% today. That pales in comparison to Annaly Capital's 16%. If all you cared about was yield, you would pick Annaly in a heartbeat. But yield isn't the only thing investors should be considering.

For starters, the two REITs do very different things. Realty Income is a net-lease landlord, which means it owns physical properties and its tenants are responsible for most of the operating costs of the assets they occupy. Across a large portfolio it's a pretty low-risk investment approach, and Realty Income is huge, with over 11,700 properties. On top of that, roughly 80% of its buildings are in the retail space, where properties are pretty interchangeable and easy to buy and sell. All told, Realty Income is a fairly boring company.

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Source Fool.com