It's been an interesting year for the stock market. The broader benchmark S&P 500 (^GSPC -1.11%) blazed roughly 24.5% higher (as of Dec. 27), thanks largely to eight high-flying tech stocks with market caps exceeding $1 trillion.
It's hard to find high dividend yields you can trust. Remember, a stock's dividend yield is a ratio of the company's declared payout to its share price.
Realty Income Corp. (O) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
Interest rates are a big deal for real estate investment trusts (REITs) because these property owners make extensive use of debt to fund deals. The current volatile interest-rate environment has crushed the REIT sector, which is down around 10% over the past three months as the market's interest-rate expectations have notably shifted.
Realty Income (O -0.32%) checks every single box for income-seeking investors. The real estate investment trust (REIT) offers a high-yielding dividend backed by an extremely strong financial profile.
While the recent sell-off has led O to offer higher dividend yields, an opportunity for investors, tariff plans and rate cut projections add some risk to the stock.
The end of the year is a time for reflection and an opportunity to look ahead. It is natural for investors to be already thinking about the best stocks to buy for the coming year.
I am upgrading Realty Income to Buy from Hold due to a share selloff since September and 6% forward annual yield indication. Rising long-term borrowing costs and lingering recession concerns in the U.S. remain, but inflating underlying real estate values and the likelihood of dividend increases make current prices attractive. I am projecting +11% to +16% total returns over the next 12 months, outperforming both a potential bear market on Wall Street and cash yields around 4%.
Realty Income remains a “buy” despite recent underperformance, driven by its diverse portfolio, strong cash flow, and strategic acquisitions, including Spirit. The company's financials show robust growth, with revenue, operating cash flow, and FFO all increasing significantly year-over-year. Realty Income is undervalued compared to similar firms and its historical valuations, presenting a compelling investment opportunity.
The S&P 500 index is trading near peak valuations. People love to compare stocks to the indices. If the index is expensive, should we use it to compare cheaper stocks?
Dividend investors looking for high-yield stocks have to carefully balance risk against reward. Reaching too far for yield can leave you owning a struggling business that might someday cut its dividend.
Realty Income is currently undervalued, offering a 6% dividend yield, and presents a solid entry point for long-term investors amid market downturns. O's diverse portfolio spans 90 industries, with 73% exposure in non-discretionary sectors, ensuring resilience and stable cash flows during economic downturns. Despite missing Q3 expectations, O's revenue grew by 27.9%, and the company continues to invest heavily in new opportunities, including data centers.