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Yahoo
2 days ago
- Business
- Yahoo
3 Reasons to Buy Realty Income Stock Like There's No Tomorrow
Key Points Realty Income offers an unusually generous but sustainable payout. It offers a strong, stable portfolio of revenue-generating properties. Realty Income is arguably more undervalued than most investors may assume. 10 stocks we like better than Realty Income › Realty Income (NYSE: O) may not look like a particularly attractive buy at first glance. The stock currently sells for approximately 30% below its peak in February 2020, meaning it never recovered from the pandemic challenges. Additionally, high interest rates appear to have deterred investors from purchasing the stock. Nonetheless, a closer inspection of the stock may actually signal opportunity instead of continued struggles. Investors may want to consider buying like there is no tomorrow for three key reasons. 1. Realty Income's dividend Realty Income is defined in large part by its dividend. Part of that is due to the fact that it is a real estate investment trust (REIT), which requires it to pay at least 90% of its net income to its shareholders in the form of dividends. It bills itself as "The Monthly Dividend Company," and it has paid a dividend every month since November 1994. That dividend has also increased at least once per year since then. Over the past 12 months, the company has approved five dividend increases. That amounted to a cumulative yearly rise of just 2.3%, increasing what was already a generous payout. The annual dividend of almost $3.23 per share amounts to a dividend yield of nearly 5.6%. To put that into context, the average S&P 500 dividend yield is just over 1.2%. Realty Income can probably afford this dividend. Over the trailing 12 months, the company reported funds from operations (FFO) income of $4.12 per share. With the company paying just over $3.15 per share in dividends during that time, it leaves cash for share repurchases or acquiring additional properties. 2. The company's property portfolio Realty Income's property portfolio also speaks to the company's stability, as it owns approximately 15,600 single-tenant properties. The REIT leases the properties under net lease arrangements, meaning the tenants cover the insurance, maintenance, and property taxes, providing the company with a more stable stream of revenue. Additionally, the company benefits from the fact that many companies prefer to lease their real estate, freeing up capital for other purposes. Such tenants include Walmart, Home Depot, and Tractor Supply, all of which have long-term track records of stability and profitability, ensuring that default rates remain low. The occupancy rate of these properties was 98.5% in the first quarter, meaning nearly all of its holdings generate revenue. This has prompted it to grow through acquisition, and in 2024, it added more than 2,000 properties to its portfolio by acquiring its peer, Spirit Realty. Moreover, in Q1, Realty Income purchased 50 properties and had an additional 71 under development, demonstrating its continued expansion. 3. The opportunity in Realty Income stock Realty Income is currently trading for approximately 30% below its all-time high reached in early 2020. Like most other stocks, it initially fell that year because of the pandemic. It rose after that brief sell-off until rising interest rates interrupted its recovery, and the latest efforts to recover have only come slowly. Indeed, higher interest costs seemed to have lowered its bottom line. Nonetheless, interest rates were not high enough to stop Realty Income from acquiring and developing properties, including the aforementioned Spirit Realty acquisition. Furthermore, Realty Income comes with a surprisingly low valuation. On the surface, the P/E ratio of 53 makes it look pricey. However, FFO income over the trailing 12 months was $4.12 per share, implying it sells at a price-to-FFO ratio of just 14. Between its low valuation and high dividend yield, the stock offers much to income and possibly growth investors as interest rates fall. Realty Income stock is a buy Despite long-term struggles, Realty Income may be a surprisingly lucrative buy. A continually rising dividend has translated into high income returns, even when factoring in the stock's struggles. Moreover, an extensive property portfolio with a low default rate makes the stock and its dividend very stable. Additionally, the stock appears attractively valued when measured by its FFO income. High interest rates have weighed on the company's financial and stock performances. Still, as such worries recede, investors can not only benefit from a generous dividend, but could also bolster returns with stock growth as more investors see Realty Income's value. Should you buy stock in Realty Income right now? Before you buy stock in Realty Income, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Realty Income wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Will Healy has positions in Realty Income. The Motley Fool has positions in and recommends Home Depot, Realty Income, Tractor Supply, and Walmart. The Motley Fool recommends the following options: short July 2025 $54 calls on Tractor Supply. The Motley Fool has a disclosure policy. 3 Reasons to Buy Realty Income Stock Like There's No Tomorrow was originally published by The Motley Fool Sign in to access your portfolio


Globe and Mail
2 days ago
- Business
- Globe and Mail
3 Reasons to Buy Realty Income Stock Like There's No Tomorrow
Key Points Realty Income offers an unusually generous but sustainable payout. It offers a strong, stable portfolio of revenue-generating properties. Realty Income is arguably more undervalued than most investors may assume. 10 stocks we like better than Realty Income › Realty Income (NYSE: O) may not look like a particularly attractive buy at first glance. The stock currently sells for approximately 30% below its peak in February 2020, meaning it never recovered from the pandemic challenges. Additionally, high interest rates appear to have deterred investors from purchasing the stock. Nonetheless, a closer inspection of the stock may actually signal opportunity instead of continued struggles. Investors may want to consider buying like there is no tomorrow for three key reasons. 1. Realty Income's dividend Realty Income is defined in large part by its dividend. Part of that is due to the fact that it is a real estate investment trust (REIT), which requires it to pay at least 90% of its net income to its shareholders in the form of dividends. It bills itself as "The Monthly Dividend Company," and it has paid a dividend every month since November 1994. That dividend has also increased at least once per year since then. Over the past 12 months, the company has approved five dividend increases. That amounted to a cumulative yearly rise of just 2.3%, increasing what was already a generous payout. The annual dividend of almost $3.23 per share amounts to a dividend yield of nearly 5.6%. To put that into context, the average S&P 500 dividend yield is just over 1.2%. Realty Income can probably afford this dividend. Over the trailing 12 months, the company reported funds from operations (FFO) income of $4.12 per share. With the company paying just over $3.15 per share in dividends during that time, it leaves cash for share repurchases or acquiring additional properties. 2. The company's property portfolio Realty Income's property portfolio also speaks to the company's stability, as it owns approximately 15,600 single-tenant properties. The REIT leases the properties under net lease arrangements, meaning the tenants cover the insurance, maintenance, and property taxes, providing the company with a more stable stream of revenue. Additionally, the company benefits from the fact that many companies prefer to lease their real estate, freeing up capital for other purposes. Such tenants include Walmart, Home Depot, and Tractor Supply, all of which have long-term track records of stability and profitability, ensuring that default rates remain low. The occupancy rate of these properties was 98.5% in the first quarter, meaning nearly all of its holdings generate revenue. This has prompted it to grow through acquisition, and in 2024, it added more than 2,000 properties to its portfolio by acquiring its peer, Spirit Realty. Moreover, in Q1, Realty Income purchased 50 properties and had an additional 71 under development, demonstrating its continued expansion. 3. The opportunity in Realty Income stock Realty Income is currently trading for approximately 30% below its all-time high reached in early 2020. Like most other stocks, it initially fell that year because of the pandemic. It rose after that brief sell-off until rising interest rates interrupted its recovery, and the latest efforts to recover have only come slowly. Indeed, higher interest costs seemed to have lowered its bottom line. Nonetheless, interest rates were not high enough to stop Realty Income from acquiring and developing properties, including the aforementioned Spirit Realty acquisition. Furthermore, Realty Income comes with a surprisingly low valuation. On the surface, the P/E ratio of 53 makes it look pricey. However, FFO income over the trailing 12 months was $4.12 per share, implying it sells at a price-to-FFO ratio of just 14. Between its low valuation and high dividend yield, the stock offers much to income and possibly growth investors as interest rates fall. Realty Income stock is a buy Despite long-term struggles, Realty Income may be a surprisingly lucrative buy. A continually rising dividend has translated into high income returns, even when factoring in the stock's struggles. Moreover, an extensive property portfolio with a low default rate makes the stock and its dividend very stable. Additionally, the stock appears attractively valued when measured by its FFO income. High interest rates have weighed on the company's financial and stock performances. Still, as such worries recede, investors can not only benefit from a generous dividend, but could also bolster returns with stock growth as more investors see Realty Income's value. Should you invest $1,000 in Realty Income right now? Before you buy stock in Realty Income, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025
Yahoo
28-05-2025
- Business
- Yahoo
This Stock Pays a Monthly Dividend. Here Is How Much You Would Need to Invest to Receive $100 Every Month
Most dividend stocks only pay their shareholders every three months, but Realty Income has built its reputation on a monthly and growing dividend. The stock's high yield and strong fundamentals make it an excellent source of passive income. 10 stocks we like better than Realty Income › When you work at your job, you're trading your time and energy for money. The magic of investing in dividend stocks reverses this concept. When your investments pay you, you can keep more time and energy for yourself, not your boss. Many stocks pay a quarterly dividend, but Realty Income (NYSE: O) will pay you every month you're a shareholder. The company is so proud of its dividend that it refers to itself as The Monthly Dividend Company. So, how much would you need to invest in Realty Income to receive $100 each month? Here is how to use the stock to build a dependable dividend machine that helps you work less and enjoy life more. Real estate is one of the oldest and most proven ways to invest. Unfortunately, beyond buying your own house, few investors have the money or knowledge to go beyond that. A commercial property can easily cost millions of dollars. That's why real estate investment trusts (REITs) are an excellent option for most individual investors. These publicly traded companies acquire and lease real estate and distribute most of their income to shareholders. REITs typically make excellent dividend stocks. Realty Income is one of the best REITs out there. Its business model is a recipe for stability: A diverse portfolio of 15,627 properties across the United States and seven other countries. Focus on tenants in consumer-facing, recession-proof businesses that reliably pay rent. Stable revenue streams with net leases that put expenses like insurance, taxes, and maintenance on tenants. Conservative management that maintains an investment-grade balance sheet. The company has paid and raised its dividend for 32 consecutive years, including during the Great Recession from 2007 to 2009 and the COVID-19 pandemic -- arguably the two most challenging events for real estate in decades. Its dividend payout ratio is 75% of its 2025 funds from operations (FFO) guidance. It's a comfortable cushion for a business that strives for stable financial performance. So, if you did want to receive $100 in dividends starting next month, how much would you invest today? With Realty Income's outsized 5.8% dividend yield, investors need less money than they would for most other stocks. Realty Income's most recently announced dividend was for $0.2685 per share. Therefore, you would need 373 shares to receive $100, an investment of roughly $20,701 at the current share price. That's a lot of cash, but don't worry. You can start with any amount and reinvest the dividends until you amass enough shares. Reinvestment means the dividends will buy more shares, which pay more dividends. You will accumulate shares faster over time. Like all things in life, there is some fine print. As wonderful a business and dividend stock as Realty Income is, investors shouldn't put all their eggs in one basket. Diversifying your portfolio across various companies, industries, and assets is always a good idea, so you're not in trouble if something unexpectedly goes wrong. If you invest in Realty Income, remember that REITs pay nonqualified dividends. It's not necessarily a big deal; it simply means the IRS will tax them as ordinary income at your applicable tax bracket. Whereas dividends from most companies eventually qualify for a lower tax rate after you've held them long enough, REITs don't pay a federal corporate income tax, so Uncle Sam treats dividends from them differently. You can consider owning Realty Income or other REITs in a tax-advantaged account. And, of course, you can consult a certified tax professional to help steer you in the right direction for your investment strategy and financial situation. A dependable dividend stock like Realty Income is a great cornerstone for a portfolio that investors can build on until they reach their financial goals. Before you buy stock in Realty Income, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Realty Income wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy. This Stock Pays a Monthly Dividend. Here Is How Much You Would Need to Invest to Receive $100 Every Month was originally published by The Motley Fool


Globe and Mail
04-03-2025
- Business
- Globe and Mail
This Stock Yields a Juicy 6% and Pays Dividends Monthly: Is It a Buy Now?
The stock market is highly unpredictable. In this volatile market, dividend stocks provide a sense of stability by offering regular income. Without a doubt, high-yield dividend stocks are appealing. However, another important factor to consider when selecting dividend stocks is the consistency of dividend payments. This serves as an indicator of a company's business stability and commitment to return cash flow to shareholders. Realty Income (O), also known as 'The Monthly Dividend Company,' has been paying and increasing dividends for the past 30 years in a row. Its impressive track record has earned it a coveted spot in the S&P 500 Dividend Aristocrats Index. Let's see if this is a good dividend stock to buy now. Realty Income: Fundamentals Are Strong Realty Income (O) is a real estate investment trust (REIT) that acquires and leases retail and commercial properties to tenants from a variety of industries. In exchange, the company receives rental income, which serves as a consistent source of income. O stock has risen 6.3% in the year to date. Realty Income's growth strategy focuses on acquiring high-quality properties with reliable tenants in a variety of industries. The inclusion of clients from various industries, such as convenience stores, drugstores, gaming, health and fitness, and restaurants, among others, reduces the risks associated with generating revenue from a single tenant. Its tenants include FedEx (FDX), Tesco (TSCDY), Home Depot (HD), Walgreens (WBA), CVS Pharmacy (CVS), and Dollar Tree (DLTR), among others. Notably, its diverse portfolio includes 15,621 properties in six countries (besides the U.S. and U.K.) with clients from 89 industries. This international diversification not only increases the company's revenue base but also reduces the risks associated with market concentration. The company's emphasis on long-term, net lease agreements lasting 9.3 years has positioned it favorably in the REIT industry. Furthermore, its strategy of securing leases that require tenants to pay for property-related expenses such as maintenance, taxes, and insurance ensures a consistent and stable income stream. In 2024, Realty Income's total revenue of $5.28 billion increased 29.5% from 2023. In the case of a REIT, adjusted funds from operations (AFFO) measure the amount of income payable as dividends, similar to net income in non-REITs. AFFO increased by 4.7% to $4.19 per share during the year, marking the company's 14th consecutive year of annual AFFO per share growth. A Reliable Dividend Payer One of the fascinating things about Realty Income is its monthly dividend payments. During its 56-year history, the company has paid out 656 monthly dividend payments. In February, the company announced a 1.5% increase in its monthly cash dividend to $0.268 per share. Additionally, the company announced a $2 billion share repurchase program for 2025, demonstrating its confidence in generating cash flow and financial stability. Furthermore, as a REIT, the company is legally required to distribute 90% of its taxable income as dividends. Realty Income pays a 5.7% yield, which is higher than the real estate sector average of 4.5%. Its AFFO dividend payout ratio of 73.9% is slightly higher, but it is sustainable if the company continues to grow its AFFO. Analysts that cover O stock expect its funds from operations to increase by 8.8% in 2025, followed by another 2.9% increase in 2026. Realty Income Corporation's reputation as 'The Monthly Dividend Company' is well-deserved, thanks to a diverse portfolio and a focus on shareholder returns, making it an appealing dividend stock for investors seeking passive income. What Does Wall Street Say About Realty Income Stock? Overall, on Wall Street, Realty Income stock is a 'Moderate Buy.' Out of the 23 analysts that cover the stock, five rate it a 'Strong Buy,' one rates it a 'Moderate Buy,' and 17 rate it a 'Hold.' The mean target price for the stock is $60.74, which is 7.4% above current levels. The Street-high estimate of $65.5 implies upside of 15.7% over the next 12 months.