Both Federal Realty Investment Trust (FRT -1.70%) and Realty Income (O -0.16%) are among the most popular real estate investment trusts (REITs) on the stock market. Both companies have quality portfolios, are still managing to grow their business, and pay high-yield dividends.

Not all REITs are created equal, though, and for me one of this pair is clearly the better investment on one particular valuation.

Tops on the top line

A REIT is basically a landlord, so the revenue it draws from its properties is central to its operations and its value for investors. If you compare the two on a price-to-sales basis, the edge clearly belongs to Federal Realty. Its price-to-sales ratio is just over 6.6 while Realty Income's is 9.1.

Why the discrepancy? I think Realty Income's high degree of popularity is largely the reason; for many investors, the company is the retail REIT. After all, it has a large and globe-spanning portfolio and appeals to income investors as one of the few stocks that pays its dividends on a monthly basis (as opposed to the standard quarterly disbursement).

Realty Income does, admittedly, have a higher dividend yield than its peer (6.8% vs. 4.6% at the moment). But yield isn't everything. Besides, of the two Federal Realty has by far the more distinguished history. In fact it's one of the market's few Dividend Kings, with a 57-year streak of dividend raises. This is the longest run for a REIT, and it blows past Realty Income's 30.

High-end portfolio

One quite admirable aspect of Federal Realty is that it's very selective about the markets and locations in which it invests; it tends to operate in relatively affluent communities where there is sufficient traffic to support a retail property. Realty Income, on the other hand, is a massive operator that has to juggle a great many facilities and might not necessarily be so discerning.

I like Federal Realty's business strategy, and continue to be impressed by those seemingly endless dividend raises. I also like the fact that it's comparatively quite cheap, so I'd pick it over Realty Income.