Understanding the Dividend Dynamics of Realty Income Corp
Realty Income Corp (NYSE:O) recently announced a dividend of $0.26 per share, payable on 2024-02-15, with the ex-dividend date set for 2024-01-31. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Realty Income Corp's dividend performance and assess its sustainability.
What Does Realty Income Corp Do?
Realty Income Corp owns roughly 13,100 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries. Recent acquisitions have added industrial, gaming, office, manufacturing, and distribution properties, which make up roughly 17% of revenue.
A Glimpse at Realty Income Corp's Dividend History
Realty Income Corp has maintained a consistent dividend payment record since 1994, distributed on a monthly basis. Since 1999, the company has increased its dividend each year, earning it the prestigious title of a dividend aristocrat. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Realty Income Corp's Dividend Yield and Growth
As of today, Realty Income Corp currently has a 12-month trailing dividend yield of 5.56% and a forward dividend yield of 5.60%, indicating an expectation of increased dividend payments over the next 12 months. The company's annual dividend growth rate over the past three years was 3.00%, which remained steady over a five-year horizon, and the annual dividends per share growth rate over the past decade stands at 4.50%. Consequently, the 5-year yield on cost for Realty Income Corp stock is approximately 6.45%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Realty Income Corp's dividend payout ratio is 2.23 as of 2023-09-30, which may suggest that the company's dividend may not be sustainable. However, the company's profitability rank of 8 out of 10 as of 2023-09-30 suggests good profitability prospects, with a consistent track record of positive net income over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
Realty Income Corp's growth rank of 8 out of 10 suggests a good growth trajectory relative to its competitors. With a strong revenue model indicated by a 5.10% average annual increase in revenue per share, the company outperforms approximately 68.65% of global competitors. Additionally, Realty Income Corp's 3-year EPS growth rate and 5-year EBITDA growth rate outperform 43.86% and 55.65% of global competitors, respectively, highlighting its capability to sustain dividends in the long run.
Next Steps
Considering Realty Income Corp's consistent dividend payments, growth rates, and payout ratio, along with its profitability and growth metrics, investors may find the stock an attractive option for steady income. The company's ability to maintain and grow its dividends, even in challenging economic conditions, demonstrates its resilience and commitment to shareholder returns. As value investors, it is essential to keep an eye on these factors when assessing the long-term viability of Realty Income Corp as a dividend-paying stock. For those looking to explore further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
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Realty Income Corp's Dividend Analysis - Yahoo Finance
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