You Can Do Better Than Nike. Buy This High-Yield Dividend Stock Instead.
Patrick Sanders, The Motley Fool
Sun, August 9, 2026 at 6:55 PM GMT+3 4 min read
If you're still waiting for Nike (NYSE: NKE) to make its long-awaited turnaround, you are likely very disappointed in the athletic wear company. Nike stock is down 33% so far this year and shows no signs of righting the ship.
I'm as patient as the next guy, but it's hard to see a holding lose value in a downtrodden stock like Nike has. Especially when there are great options on the table that have a long track record of performance. And when you add a 5% dividend yield, why look any further?
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Realty Income (NYSE: O) has long been my favorite high-yield dividend stock. Shares are up 11% so far this year, but thanks to Realty Income's famed monthly dividend (currently yielding just over 5%), your total return from the real estate investment trust is a solid 15% so far this year.
Let's look closer at Realty Income, which just announced its second-quarter earnings results on Aug. 5.
Realty Income's more-than-solid earnings
Realty Income is a REIT -- a specialized entity that holds commercial real estate, residential rental properties, or other types of real estate. Congress approved REITs in the 1960s to give retail investors access to income-producing real estate.
There are many different kinds of REITs, but Realty Income is classified as a retail REIT. The company owns more than 15,500 properties across 92 industries, leased to nearly 18,000 clients. Realty Income's broad array of clients means it is relatively immune to downturns affecting a specific industry or company.
Realty Income also operates under net lease agreements, which means tenants pay base rent as well as at least some of the operating expenses, such as taxes, insurance, and maintenance. The arrangement keeps Realty Income's expenses down, which in turn benefits shareholders.
Grocery stores account for the largest concentration of Realty Income properties at 11.1%, but the company also has convenience stores, home improvement stores, dollar stores, restaurants, drug stores, and more. The company's portfolio occupancy rate was 98.8% at the end of the second quarter.
Earnings for the second quarter were strong, as revenue of $1.547 billion was up 9.7% from a year ago. Net income was $344 million, up from $196.9 million, and net income per share rose from $0.22 to $0.37.
The company raised its monthly dividend in June by 0.7%, bringing the annual payout to $3.25 per share and making it just over 5%. But don't expect the payout to remain there -- Realty Income prides itself on its dividend payout and has raised its dividend for 115 consecutive quarters.
In addition, Realty Income's adjusted funds from operations (AFFO) improved from $1.05 to $1.09 per share, helping the REIT maintain and grow its monthly payout.
I've always thought Realty Income was one of the best high-yield stocks you can buy, and the second-quarter earnings results did nothing to change my mind.
Should you buy stock in Realty Income right now?
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Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike and Realty Income. The Motley Fool has a disclosure policy.
You Can Do Better Than Nike. Buy This High-Yield Dividend Stock Instead. was originally published by The Motley Fool
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