People chase yield, you know. It’s a simple equation. A little number on a screen. Makes them feel…secure. BP and Realty Income both offer it. Roughly. But numbers lie. Or at least, they don’t tell the whole story. So it goes.
BP, an oil company, throws off a decent yield. 5.6% at last check. Realty Income, a REIT, a bit less. 5.3%. If you just looked at that, you’d buy BP. You’d probably think you were being clever. But cleverness doesn’t always pay the bills, does it?
The Dividend Itself
Yield is just math. A snapshot. Realty Income has raised its dividend every year for thirty years. Thirty years. That’s a lot of years. BP cut its dividend in 2020. They said it was strategic. They wanted to be…greener. A noble thought. But then they changed their mind. Oil is easier, you see. So it goes.
Realty Income, meanwhile, is exiting office properties, expanding into Europe, and starting an asset management business. They’re actually doing things. Without cutting the dividend. A curious thing, that. They’re building a boring, reliable machine. And that’s not a bad thing, even if it lacks a certain…drama.
TotalEnergies, another oil giant, tried the green thing too. And they didn’t cut the dividend. They kept going. BP couldn’t manage that. It’s a small thing, perhaps. But it speaks volumes.
BP has a slightly higher yield, yes. But reliability is worth more than a few extra pennies. Especially if you’re counting on those pennies. If you need the income, Realty Income is the less disappointing choice.
The Business of It All
Comparing BP and Realty Income is like comparing a hurricane to a laundromat. One is volatile, unpredictable. The other…just washes clothes. Realty Income owns properties. Single-tenant retail. They lease them out. The tenants pay the bills. It’s remarkably simple. And remarkably stable. They have over 15,500 properties. A lot of buildings. A lot of rent.
The cost of upkeep falls on the tenants. They’re responsible. Realty Income just collects the rent. It’s a beautifully boring business. Backstopped by a solid balance sheet. They’re not taking wild chances.
BP, on the other hand, is in the oil business. Commodity prices go up, down, sideways. Earnings swing wildly. It’s a rollercoaster. And dividend payments tend to follow suit. Only ExxonMobil and Chevron have managed to consistently raise dividends through the booms and busts. BP hasn’t. So it goes.
BP’s yield is attractive, sure. But it comes with a risk. A debt-to-equity ratio that’s twice that of its peers doesn’t inspire confidence. It’s a bit like building a house of cards. It might stand for a while. But eventually….
Be Careful What You Wish For
Comparing BP and Realty Income is a bit silly, really. Apples and oranges. But they have similar yields. So people look. And they get distracted. Realty Income has proven it can deliver a reliable dividend. BP hasn’t.
There are other oil stocks that are more reliable, though. TotalEnergies, for example. They offer a slightly higher yield and haven’t cut the dividend. A rare combination.
We all want income. We all want security. But sometimes, the most attractive yield is the most disappointing one. So it goes.
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2026-01-20 12:32