Monthly Dividend Stock In Focus: Realty Income

Investors that are interested in owning stocks for income can find it easy to be drawn to Real Estate Investment Trusts, or REITs. These stocks offer investors the chance to own a piece of a trust that leases out properties and passes essentially all of its earnings back to shareholders in the form of dividends.

Stocks that are structured in this way generally offer high yields, but not all are created equal.

One that we believe is superior to many of its competitors is Realty Income (O). Not only does it offer investors a nearly 4% yield, but Realty Income’s dividend history is extraordinary.

And apart from having a very strong dividend history, Realty Income pays its shareholders monthly instead of quarterly, which affords investors faster compounding of wealth.

This article will discuss Realty’s business model, its growth prospects, and its dividend in detail.

Business Overview

Realty Income is a retail-focused REIT that has made its name in the investing world with its dividend growth history. Part of its appeal certainly is not only in its actual payout history, but the fact that these payouts are made monthly instead of quarterly.

The trust owns about 5,800 properties and has a market capitalization in excess of $21 billion.

Realty Income focuses on standalone properties, rather than ones connected to a mall, for instance. That increases the flexibility of the tenant base, and helps the trust diversify its customer base.

Source: Q4 Investor Presentation, page 4

The trust has annualized revenue of ~$1.3 billion and is one of only two REITs that can say it is a member of the Dividend Aristocrats and has at least two A3/A- credit ratings.

The trust has 262 different tenants across 48 different industries in nearly every state in the US. Importantly, it also has 22 years out of the last 23 where it generated positive earnings growth.

Realty Income reported its fourth quarter earnings on February 20th, and results were strong. The trust reported revenue of $343 million, a 10% increase from the year-ago period. Growth came from a larger asset base from new investments, as well as increasing rents for existing properties.

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Disclaimer: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities. However, the publishers of Sure ...

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