Shares of Realty Income (NYSE:O) gained 2.68% over the past month after gaining 2.28% the month prior.
O rises 11.6% YTD, backed by global expansion, steady dividends and high occupancy, but valuation raises questions for new investors.
The Realty Income (O) options strategy continues to generate consistent premium income through rolling short strangles, thanks to what has been a range-bound share price. Though there are times that O can surge higher, it tends to be when recovering from deep drops in overall market crashes, which can make writing options an interesting strategy. O's ~5.5% dividend yield becomes more attractive as rates fall, with monthly payouts and over 30 years of dividend growth supporting long-term value.
Realty Income Corporation (NYSE:O ) BofA Securities 2025 Global Real Estate Conference September 9, 2025 4:30 PM EDT Company Participants Sumit Roy - President, CEO & Director Jonathan Pong - Executive VP, CFO & Treasurer Conference Call Participants Jana Galan - BofA Securities, Research Division Presentation Jana Galan Research Analyst Good afternoon, and welcome to Bank of America's 2025 Global Real Estate Conference. I'm Jana Galan, and I cover the net lease REITs at BofA.
O's income thesis at >5% yields remains compelling, thanks to its discounted valuations arising from the expensive borrowing cost environment, with it uncertain when the Fed may pivot. This is significantly aided by the healthy balance sheet and the REIT's well-diversified assets, mitigating risks arising from tenant and sector concentration. O's payouts remain well-covered at ~75% of its AFFO per share, allowing them to offer a secure income story for those seeking monthly incomes.
O's triple-net leases and broad tenant base drive steady cash flows and support consistent dividend growth.
Realty Income remains a solid income-focused REIT with a strong dividend history, but recent underperformance raises concerns about future growth and portfolio quality. AFFO growth is modest, guidance was raised, but investment spreads may be overstated due to cost of capital assumptions, potentially masking weaker accretion. Valuation is attractive compared to peers, offering stable income and potential upside if interest rates fall, but capital appreciation is less compelling.
O's 30+ years of dividend growth, global expansion and resilient portfolio fuel its appeal for income-focused investors.
Realty Income stock has underperformed, but improved guidance and macro trends suggest the worst is likely over for long-term investors. Management's upgraded 2025 AFFO outlook and successful European diversification has offered more confidence in its fundamental growth drivers. A recovery in AFFO growth is expected from 2026, while interest rates headwinds are expected to be lowered further.
REITs are deeply out of favor, but this has created a rare valuation gap vs. equities, historically followed by strong outperformance. Realty Income has continued to deliver double-digit operational returns. With interest rate cuts likely ahead, the environment is set to become much more favorable for REITs like O.
Realty Income offers unmatched safety, stability, and a 5.6% yield, making it my #1 high-yield pick for income-focused portfolios. While total returns lag peers and the S&P 500, O's diversified, investment-grade tenant base and 30-year dividend growth record support its reliability. Growth is slowing, with AFFO expected to rise just 2-3% annually, but current valuation (P/AFFO 13.6x) offers a margin of safety for buyers.
Realty Income (O 1.09%) may finally be getting the catalyst it needs. The company specializes in single-tenant net-leased properties and has built a massive property portfolio in its 56 years of existence.