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Realty Income’s business
Realty Income is a real estate investment trust (REIT) that specializes in single-tenant commercial properties typically used for retail purposes. Under its net-lease agreements, the tenant is responsible for paying the property’s maintenance, insurance, and taxes, ensuring a steady stream of revenue for Realty Income.
It owns approximately 15,600 properties and boasts an occupancy rate of almost 99%. Since it leases to established retail heavyweights such as Walmart, Dollar General, and Tractor Supply, it benefits from a reliable tenant base.
Moreover, Realty Income has paid a monthly dividend since it went public in 1994. It even went so far as to trademark the phrase “The Monthly Dividend Company.” Additionally, because it has raised its annual payouts at least once per year, it has a 32-year streak of dividend increases.
That dividend, now about $3.25 per annually, yields about 5.4% at the current price, an attractive prospect when fewer and fewer S&P 500 stocks yield over 4%. As of this writing, $5,000 will buy about 90 s, which will generate about $293 in annual dividends.
A payout that can take a lot of the sting out of a short-term loss of stock value. When investors benefit from a steady income stream, they have an added incentive to hold on and wait for a stock to recover.
Realty Income by the numbers
Realty Income is now down by about 18% from its 52-week high in March, and off 8% over the past 12 months. Rising interest rates are ly to blame for the sell-off. As an owner and purchaser of real estate, the company has to refinance debt periodically, and with rates headed higher, it faces increased expenses and, by extension, reduced profits.
However, Realty Income has improved its financials despite this headwind. In the first half of 2026, revenue increased by 11% from year-ago levels to $3.1 billion. Also, net income surged by 47% to $656 million.
That leaves Realty Income with a sustainable dividend. Its funds from operations (FFO) — one of the preferred metrics for gauging a REIT’s profits — was $4.27 per over the trailing 12 months. That was well above the current $3.25-per-dividend.
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NYSE: O
Realty Income
Premium Feature
Moneyball Superscore
84/100
Today’s Change
(-0.34%) $-0.19
Current Price
$55.35
Key Data Points
Market Cap
$52BMarket cap calculated using publicly traded s outstanding only. Does not include unlisted, private, or dual-class non-traded s. Implied market cap may vary.
Day’s Range
$55.10 – $55.71
52wk Range
$55.07 – $67.94
Volume
48.4K
Avg Vol
6.2M
Gross Margin
50.82%
Dividend Yield
5.86%
Yet investors may also be balking at its P/E ratio, which, at 41, makes the stock appear expensive. Still, its price-to-FFO ratio is just 13. Hence, prospective holders might want to consider buying before more investors come to recognize how much of a bargain Realty Income stock actually is.
Moving forward with Realty Income stock
Investors should consider buying Realty Income stock if they have $5,000 available, and they should hold on even if the stock drops 10% after they pick it up.
Nobody s to lose money on stocks. Nonetheless, since the market is nearly impossible to time, even promising investments may end up underwater when they are new additions to your portfolio. Additionally, even if that down period lasts, investors will still generate monthly income, giving them an added reason to hold.
Moreover, its numerous clients keep nearly all of Realty Income’s properties occupied, making it ly that it will continue to grow its portfolio of properties and raise its generous dividend, even in a rising-interest-rate environment. Considering the REIT’s financials, a $5,000 investment in Realty Income should be a winning move regardless of what happens with the stock in the near term.
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About the Author
Will Healy is a contributing Motley Fool stock market analyst covering technology and consumer goods industries. Before The Motley Fool, Will was a freelance writer covering stocks and personal finance for MSN Money, Yahoo! Finance, and Nasdaq. Earlier in his career, he was an expert in geographic information systems, applying spatial and IT skills to perform RF and demographic analysis in the telecom industry. He holds a bachelor’s degree in journalism from Texas A&M University and an MBA in finance and strategy from the University of Texas at Dallas.
Stocks Mentioned
Realty Income
NYSE: O
$55.35
(-0.34%)-$0.19
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