Realty Income Just Made Its 136th Dividend Increase. Here's How Much $6,100 Invested Pays You Monthly Now.
Key Points
Realty Income has now raised its dividend for 116 quarters in a row.
The REIT backs its high-yielding monthly dividend with a top-notch portfolio and balance sheet.
Realty Income (NYSE: O) is at it again. The Monthly Dividend Company® just bumped up its monthly payment to $0.2715 per share from $0.271 per share, a modest 0.2% increase. At its new annualized rate of $3.258 per share, the real estate investment trust (REIT) yields 5.3% at its recent $61 share price. If you bought 100 shares right now (costing around $6,100), you'd receive $27.15 in dividend income each month.
Here's a look at what makes Realty Income such a consistent income investment.
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Delivering on its mission
Realty Income's stated mission is to "deliver dependable monthly dividends that increase over time." The REIT has executed that mission flawlessly. It has now declared 675 consecutive monthly dividends over its 57-year operating history, proving its dependability. Meanwhile, with 136 increases since its public market listing in 1994, including 116 consecutive quarters, its dividend payout has certainly increased over time. The REIT has grown its monthly dividend at a 4.1% compound annual rate since 1994, including three times this year.
The bedrock supporting the REIT's consistent monthly dividend is its high-quality real estate portfolio. It owns a diversified portfolio of over 15,500 retail, industrial, gaming, data center, and other properties across North America and Europe, secured by long-term, triple-net leases with many of the world's leading companies. Notable tenants include FedEx, Home Depot, and Walmart. Its leases provide it with very stable rental income, as tenants pay all property operating costs, including routine maintenance, real estate taxes, and building insurance.
The REIT also has a fortress financial foundation. Realty Income has a conservative dividend payout ratio (less than 75% of its adjusted funds from operations), enabling it to retain nearly $1 billion annually to reinvest in new properties. It also has an A credit rating and a growing list of financial partners, giving it ample access to capital to continue investing in more income-producing real estate.
With a $15 trillion total addressable market opportunity, Realty Income has lots of room to keep growing. These features make it the best monthly dividend stock you can buy, whether you have $6,100 to purchase 100 shares or just $61 for a single share.
Matt DiLallo has positions in FedEx, Home Depot, and Realty Income. The Motley Fool has positions in and recommends Home Depot, Realty Income, and Walmart. The Motley Fool recommends FedEx. The Motley Fool has a disclosure policy.