Are you looking for predictable income that you can rely on through the various up and downs of the market? Better yet, what about a super safe dividend that pays out monthly to cover regular expenses?
Realty Income is the rare dividend stock that pays out monthly versus quarterly and it is currently offering a yield of 5.47%. That means an investment of $55,555 in O stock would produce $250 predictably each and every month. So, is it worth buying?
Why Realty Income Is So Attractive
A stalwart of retail real estate investment trusts (REITs), Realty Income oversees a vast portfolio encompassing 6,500+ properties, which are leased to diverse clientele groups, including service-oriented and non-discretionary retailers. This strategic lease portfolio insulates the company from economic fluctuations and the encroachments of online retail giants.
With an illustrious track record, Realty Income has sustained its dividend growth, continuously elevating its base annual dividend for 30 consecutive years. Moreover, it has consistently enhanced its quarterly payout for an impressive 100+ consecutive quarters. This distinguished record positions the REIT as one of the most steadfast and secure dividend stocks in the current market landscape.
How To Get $250 Monthly?
To secure a monthly dividend income of $100 from Realty Income, an investment of $55,555 is needed. The reasons to buy the stock are multi-faceted. To begin with, it offers an elevated dividend yield that eclipses that of the S&P 500 by 3x.
Perhaps more importantly, though, the dividend can be counted on because its track record over the past three decades is so strong. That predicability in payments is a function of the company’s diverse lease portfolio. Realty Income’s lease portfolio is carefully crafted to shield it from the tumultuous tides of economic upheaval and the burgeoning competition from online retailers.
Is Realty Income’s Dividend Sustainable?
One overarching reason to be optimistic is that Realty Income enjoys a sky-high occupancy rate. As of the June quarter, fewer than 140 of the company’s expansive inventory of 13,000+ properties stood unleased. When you crunch the numbers that means approximately 1% of the entire portfolio sits unoccupied. Pair that with a commendable weighted average remaining lease term of 9.6 years and you can see how the company is able to maintain a steady stream of predictable cash flows long into the future.
The company’s seasoned management team adds another layer of appeal for investors. In recent times, the top brass has ventured beyond the confines of the retail sector and successfully clinched two substantial deals within the gaming industry.
In December 2022, Realty Income inked a massive $1.7 billion sale-leaseback agreement pertaining to the land and real estate assets of Encore Boston Harbor, under the stewardship of Wynn Resorts.
More recently, the company cemented an agreement committing $950 million to a joint venture alongside Blackstone Real Estate Income Trust. This partnership will assert a 95% stake in the real estate assets of The Bellagio Las Vegas, operated by MGM Resorts International. These strategic transactions not only usher in fresh avenues of cash flow but also serve as a pivotal step in diversifying Realty Income’s burgeoning portfolio.
The bottom line is Realty Income is the rare monthly dividend paying REIT that has a high yield and ultra-safe, predicable cash flows long into the future.