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Even before Realty Income (O) was publicly traded, they had never missed or reduced a dividend payment since its founding in 1969 — and since its public IPO in 1994, the REIT has paid a monthly dividend without interruption.

It also has 108 dividend raises at an average of more than four dividend raises per year, including raises for 92 consecutive quarters. Like clockwork, the Realty Income machine keeps turning and depositing an ever-growing stream of income into the accounts of investors.

Realty Income has more than 600 tenants in more than 50 different industries. The wide diversification makes the company practically immune to any single tenant or property failures. Thanks to their diversity, even the radical impact of COVID-19 has failed to derail Realty Income's dividend, or their growth.

Realty Income focuses on acquisitions with long-term leases. At acquisition, the properties they buy have average remaining lease terms of 13 years. They invest in high-quality locations that the tenants want for the long-term. This creates a pre-defined income, even during changing market conditions. The long leases provide the company with “bond-like” earnings that are extremely reliable. Their tenants do not want to lose the locations, so even with a highly disruptive event like COVID-19, the vast majority of their tenants continued to pay.

The best part is that even after 10-15 years, the vast majority of Realty Income's tenants renew their leases. 95% of their leasing activity in the first nine months of 2020 were regarding renewal of the existing tenant.

To reduce risk even further, Realty Income strategically invests in more defensive sectors which are expected to suffer little bankruptcies during recessions. Their top sectors are convenience stores, grocery stores, drug stores, and dollar stores. Overall, Realty Income is one of the least risky REITs out there.

• It has never cut its dividend, not even during the Great Financial Crisis. Its cash flow has never suffered a yearly drop in excess of 2%.
• The collection of properties is of the highest quality – providing sustainable and defensive income for years to come.
• Rents are locked-in long-term agreements and insensitive to economic cycles.
• Conditions for growth are outstanding and they have the balance sheet to exploit them.

This is why we consider this stock to be one of the best REITs for conservative income investors, including retirees. In 2021 especially, we can look forward to Realty Income having a lot of growth opportunities and thriving in this low-interest rate environment. Recently, the yield has been at 4.6%, and one can expect 4%-5% annual dividend growth. Pick up this monthly-paying dividend machine while it remains cheap.