Market Commentary: 1 Monthly Income Play You Don’t Want To Miss

If getting paid passively monthly sounds like something you’ve been looking for, Realty Income might be just the stock you’ve been looking for. From a single store 54 years ago, Realty Income is now a true behemoth that rewards investors seeking monthly income.

Realty Income’s specialty in single-tenant, freestanding retail properties might sound like a risky venture, especially in an e-commerce era but this REIT has carefully focused on recession-resistant tenants that are less susceptible to online disruption. Names like Walgreens and FedEx feature prominently in its tenant list, providing a level of trust and predictability.

Another fascinating element of Realty Income’s approach is the triple-net lease structure that ensures that tenants bear the brunt of property taxes, insurance, and maintenance costs, contributing to a stable revenue stream. As of the last quarter, the REIT encompassed over 13,100 properties across the U.S. and Europe, each generating a steady flow of income.

Monthly Income Ad Infnitum?

Impressively, the company has paid over 635 consecutive monthly dividends and its dividend yield hovers presently around 5.5%. Best of all, its paid out monthly.

Now, combine this with a 99% occupancy rate and a 3.1% year-over-year increase in its adjusted funds from operations (AFFO) per share, and you’ve got yourself a winner.

In a turbulent market—where Realty Income’s share price has seen a 13% drop year-to-date mainly due to rising interest rates—these metrics offer reassurance.

Spooked By Stock Drop?

Sure, Realty Income’s stock price has seen better days, but it’s crucial to separate the stock’s recent performance from its enduring business fundamentals.

The primary reason for the decline appears to be the rise in interest rates, a factor that tends to make income-generating stocks like REITs less attractive. But don’t this be a deal-breaker, the REIT has demonstrated its resilience by growing its adjusted FFO per share even amid interest rate hikes and economic uncertainties.

One of the most enticing aspects of Realty Income as an investment is its potential for future growth. While it’s already one of the most extensive REITs around, the sky’s the limit. The net-lease retail and service real estate markets alone are estimated to be worth several trillion dollars in the U.S.

The Bottom Line

Realty Income offers a blend of stable income, promising growth, and substantial value, making it an ideal candidate for those looking to build a resilient investment portfolio. Its performance metrics are nothing short of impressive, and its business model is designed to withstand economic storms.

So, if you’ve been considering adding a monthly dividend payer to your portfolio or increasing your existing stake—especially at its current discounted price—there’s a compelling case to move ahead.