With July’s inflation report set to test expectations for Federal Reserve rate cuts and Treasury yields holding around 4.68%, rate sensitive stocks tied to income look especially interesting. The next move in yields could quickly change how investors value steady dividend payers, which creates a real sense of FOMO if you are sitting on the sidelines. This article walks through three stocks exposed to this macro story from our defensive income screener.
The three stocks covered below are just a sample from this idea, and the full screen surfaced 34 more U.S. utilities and REITs with similar income profiles and equally interesting stories. To go straight to the source and identify your own highest conviction income plays, analyze the U.S. Rate‑Sensitive Defensive Income Sectors (Utilities and REITs) screener.
Essential Properties Realty Trust (EPRT)
Essential Properties Realty Trust is a net lease REIT that owns over 2,200 single tenant properties across service and experience focused sectors, collecting predictable rent under long term leases. Almost all of its US$615 million in annual revenue comes from commercial real estate, entirely in the United States, and the portfolio is 99.8% leased with an average remaining term of 14.4 years. The company has a market cap of about US$6.6b, which puts it firmly in mid cap territory within the REIT space.
Investors looking at Essential Properties Realty Trust right now are really weighing two forces. There is a highly diversified, largely e commerce resistant portfolio with long leases and rising dividends, which aligns with a backdrop where a cooler CPI print could support lower rates and increase the present value of future rent streams. In contrast, there are clear pressure points, including higher funding risk, an active equity issuance program and increased competition in net lease deals that management itself has highlighted. Taken together, it can be viewed as a more straightforward way to gain exposure to the income side of rate sensitivity, but one where tenant quality, capital costs and insider selling trends may matter more than the headline yield alone suggests.
Essential Properties Realty Trust appears to be a classic income play, yet its long leases and equity funded growth plans leave a lot beneath the surface. Get the full story in the 4 key rewards and 2 important warning signs (1 is major!)
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Essential Properties Realty Trust and the other two stocks in this article all came out of a single Simply Wall St screener, but the real edge is in creating a set of filters that fits how you judge income and risk. Use our flexible Screener to combine valuation, dividends, balance sheet strength and risk checks into a custom watchlist, or start with any of our curated Investing Ideas for ready made frameworks to research.
Realty Income (O)
Realty Income is a large net lease REIT that buys single tenant commercial properties and rents them out under long term contracts, with a mission to pay dependable monthly dividends. Almost all of its US$6.1b in annual revenue comes from leasing property to clients, spread across the U.S., U.K. and parts of Europe. The company has a market cap of about US$58.7b, which puts it among the bigger listed REITs globally.
Investors watching the July CPI print and 10 year yields have a strong case to look at Realty Income as a classic rate sensitive income stock with a twist. You get an A rated balance sheet, 673 consecutive monthly dividends and recent AFFO guidance raised for 2026, all tied to a portfolio that increasingly leans into industrial assets, data centers and Europe. The other side is worth understanding as well, including relatively high leverage, equity and convertible issuance, and a P/E that sits well above many retail REIT peers at a time when higher for longer yields could pressure bond proxy valuations again. The full picture of how this mix of steady income, active capital raising and interest rate sensitivity fits your income strategy is where things get interesting.
Realty Income’s mix of monthly dividends, A rated balance sheet and global expansion can look like a simple income story at first glance. The real question is how that combination, plus recent capital raising and interest rate sensitivity, fits together in practice. Walk through the full 4 key rewards and 1 important major warning sign
W. P. Carey (WPC)
W. P. Carey is one of the larger net lease REITs, owning about 1,748 single tenant, industrial, warehouse and retail properties that total roughly 188 million square feet across the U.S. and Europe under long term leases with built in rent escalations. The company focuses on operationally critical real estate, with a history dating back to its incorporation in Maryland in 1973. W. P. Carey currently has a market cap of about US$16.0b.
W. P. Carey gives you a mix of rate sensitivity and real estate exposure that many income investors look for. You have one of the bigger net lease platforms, long duration, inflation linked leases and recent Q2 2026 guidance raised for both AFFO and investment volume. This ties directly into the July CPI story and where bond yields settle next. At the same time, an unstable dividend record, reliance on debt funding and sensitivity to tenant credit mean you need to look closely at how management is recycling assets and pricing new deals. The attraction is a large, diversified portfolio that still carries real credit and payout risks investors should understand before calling it a pure defensive play.
W. P. Carey’s huge, inflation linked portfolio can look like a straightforward income machine. Yet the real story sits in how those leases, tenant risks and payout decisions interact in the 3 key rewards and 2 important warning signs (1 is major!)
Curious To Seek Alternatives Beyond Dividends
Fresh opportunities can move from quiet to breakout quickly. Momentum builds, prices fly, and latecomers get caught chasing. Scan under the radar for now and get in early.
- Hunt for high yielding income stocks that still look resilient by screening a curated set of 9 dividend fortresses before the crowd starts chasing the same payouts.
- Spot potential future category leaders by scanning 19 top founder-led companies while sentiment is still forming and prices have not fully reflected long term ambition.
- Track companies where balance sheet strength meets momentum using a targeted list of solid balance sheet and fundamentals (49 results) and move before stretched valuations catch up.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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