One Retail REIT Cut Its Dividend in 2020 but Crushed Its Peer Since. Which Is Roth Ready?

One Retail REIT Cut Its Dividend in 2020 but Crushed Its Peer Since. Which Is Roth Ready?

Trey Thoelcke

Tue, September 15, 2026 at 3:45 PM GMT+3 5 min read

• SPG +0.07%
• O -0.39%

Quick Read

• Simon Property Group cut its dividend 38% in 2020 but still crushed Realty Income with 58% versus 16% five-year total returns.

• Realty Income's 5.5% yield advantage over Simon's 4.3% vanishes inside a Roth, where tax-free compounding makes total return the only metric that matters.

• Simon's Q1 2026 revenue jumped 19% to $1.76 billion with raised full-year FFO guidance, backing its total-return edge with real operating momentum.

• Read More: Avoid these 13 retirement mistakes before they derail your future (sponsor)

For a retirement account choosing between Realty Income (NYSE:O) and Simon Property Group (NYSE:SPG), the setup contradicts what income investors usually assume. That is, the retail REIT with the perfect payment record has been the weaker investment over the longer measurement windows. Realty Income trades at $59.35 as of early September 15, 2026, and is up 9.0% year to date, 3.6% over one year, 15.8% over five years, and 52.8% over 10 years. Simon trades at $204.97, up 14.5% year to date, 17.5% over one year, 58.2% over five years, and 65.1% over the past decade. So, which one is Roth ready?

What Happened to Simon's Dividend

Simon's regular quarterly payout was $2.10 at the February 13, 2020, ex-date, then dropped to $1.30 at the July 9, 2020, ex-date when mall tenants were shuttered and rent collection collapsed. The recovery was earned back in steps: $1.40, $1.50, $1.65, then a slow climb through $1.75, $1.90, and $2.00. The regular quarterly amount did not return to $2.10 until the December 9, 2024, ex-date. It now stands at $2.25, an annualized $9.00. Simon rebuilt the payout while consolidating premium assets, including the November 2025 buyout of the remaining Taubman interest across 22 premium properties.

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Realty Income's Streak Is the Real Deal

Realty Income never cut its payout. Its monthly distribution moved from $0.2325 at the January 31, 2020, ex-date to $0.2345 by December 31, 2020, and it has continued to rise in tiny steps to $0.2715 at the September 30, 2026, ex-date. The company reports 116 consecutive quarterly increases and 675 consecutive monthly dividends declared. The forward annualized payout is $3.258, and the current yield is 5.5% versus Simon at 4.3%. For an investor who spends the distributions, that reliability carries tangible value.

Where the Performance Gap Actually Sits

Simon wins every measurement period the data covers. It leads on one year (17.5% vs. 3.6%), on five years (58.2% vs. 15.8%), and on 10 years (65.1% vs. 52.8%). Both are down over the past month (Realty Income off 5.5% and Simon off 6.7%). Simon backs the gap with operating momentum: Q1 2026 revenue of $1.76 billion (+19.3%), Real Estate funds from operation (FFO)/share of $3.17 (+7.5%), and raised 2026 FFO guidance to a range of $13.10 to $13.25. Realty Income also grew, with Q2 2026 revenue of $1.55 billion (+9.7%), adjusted funds from operation (AFFO)/share of $1.09, and 2026 AFFO guidance of $4.44 to $4.45, but the growth rate is lower.

Why This Matters Inside a Roth

REIT distributions are largely taxed as ordinary income rather than at qualified-dividend rates, so a Roth IRA is a natural wrapper for them. Inside a Roth, the entire question collapses into total-return compounding over decades. The tax drag on Simon's lower yield disappears, and Realty Income's income advantage is neutralized because none of it is spent.

Verdict

Simon Property Group is the better Roth holding. The 2020 cut was a consequence of a specific shock, and the recovery to $2.25 quarterly came alongside portfolio consolidation that shows up in FFO and in the stock. Realty Income remains a legitimate choice for a taxable income sleeve where the monthly check itself is the point. (The case for building a dividend ladder you never have to sell out of is one we made in a free guide available here.) In a Roth, where compounding is the only scoreboard, Simon has done the compounding, and the 10-year, five-year, and one-year numbers all say the same thing. Retirement investors setting up long-dated Roth exposure to retail real estate may prefer Simon.

Help Avoid These 13 Retirement Mistakes Before They Derail Your Future

One investment mistake could create big risks for your retirement. Many investors make the same critical errors: being too conservative, making big bets on "sure things," or paying excessive fees. Any of those blunders can endanger your hard-earned savings.

Now you can learn the mistakes even experienced investors make (and ways you can sidestep them before it's too late) with this new guide: 13 Retirement Mistakes and How to Avoid Them from Fisher Investments. (sponsor)

Contact editorial@247wallst.com for any questions or corrections.