Despite having fallen -1.75% over the past month, shares of Realty Income (NYSE:O) have outperformed the market and avoided the major losses that have impacted other sectors more significantly than real estate.
I opened a position in Realty Income (O) for its monthly income, raising dividends, and stable implied volatility, enabling a consistent covered call strategy. By purchasing 200 shares at $57 and selling covered calls, I achieve an annualized yield of 16.94%, outperforming the broader market's 8-10%. Realty Income's expansion into Europe, strong deal pipeline, and solid fundamentals make it a bullish investment, with a $4 billion investment pipeline.
The big news of late has been the quick decline suffered by the Nasdaq Composite (^IXIC -0.33%) and the S&P 500 index (^GSPC -0.22%), both of which fell into correction territory. It remains to be seen if this is the first stop on the way to a bear market, however that outcome is certainly what investors are worrying about.
The saying "it's like watching a train wreck" exists for a reason. When something particularly bad is happening, human beings have a hard time looking away.
Realty Income offers a strong 6% monthly dividend yield, supported by a $50 billion market cap and a diversified portfolio of over 10,000 properties. The company has consistently deployed capital with a 7.4% cash yield, expanding both domestically and internationally, enhancing its AFFO per share by 4.8% YoY. Realty Income's robust balance sheet, with a 36% debt-to-market cap ratio and low interest rates, ensures financial stability even in higher treasury rate environments.
The REIT market seems to be one of the few segments that can benefit from the increased risk of a recession. Yet, investors have to still be careful about REIT specific risks that could materialize in the recessionary regime. In this article, I present two REITs, which I currently own in my portfolio for high-income extraction.
If you are the type of investor who likes to buy and hold stocks forever, you have to use a different set of rules. Simply picking the highest yielding stocks off a list, like the companies in the S&P 500 index, won't do.
Market volatility favors income investors with dry powder on hand to buy undervalued dividend stocks. Pfizer offers a 6.7% yield, trading at a low valuation with resilient drug portfolio growth and cost-saving initiatives. Realty Income Corp. provides a 5.7% yield with reliable cash flows and attractive valuation with potentially strong long-term returns.
Realty Income reported decent Q4 earnings, driven by acquisitions like Spirit Realty and robust leasing, making it an attractive REIT investment for dividend investors. O stock distributes 75–76% of its adjusted FFO as dividends to shareholders, resulting in a strong 6% dividend yield. The REIT's growing portfolio and strategic acquisitions position it well for continued growth in FY 2025.
Realty Income (O -0.91%) is on a mission to invest in places that enable it to deliver a dependable monthly dividend to its investors that increases over time. The real estate investment trust (REIT) has succeeded in its mission over three decades as a public company and recently declared its 130th dividend increase since coming public in 1994.
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O's latest dividend hike reflects its ability to generate decent cash flows from its high-quality portfolio and balance sheet strength.