Better Passive Income Buy: W.P. Carey or Global Net Lease

When investors are looking to create streams of passive income, the first thing they often check is a stock's dividend yield. In many ways, that makes sense: Higher dividend yields can equate to large payouts for investors. But there is so much more to consider when evaluating a company. Let's take a closer look at high-yielding real estate investment trusts (REITs) W.P. Carey (NYSE: WPC) and Global Net Lease (NYSE: GNL) to understand why there's more to an investment prospect than its dividend yield. 

Both W.P. Carey and Global Net Lease are net-lease REITs. This means that they buy single-tenant properties, often directly in sale/leaseback transactions, for which the tenant is responsible for most of the operating costs of the assets. Although any single property is fairly high-risk, given that there's only one tenant, when spread out across a large enough portfolio, net lease is a pretty low-risk approach. W.P. Carey owns around 1,300 properties, whereas Global Net Lease owns just over 300 assets. 

Both REITs benefit from diversified portfolios. From a geographic perspective, around 37% of W.P. Carey's rents come from outside the United States, mostly from Europe. Roughly 40% of Global Net Lease's mix is from outside the United States, again mostly Europe.

Continue reading

Source Fool.com