If you're concerned about having enough income after you retire, there are lots of options. Buying rental properties is a popular one, but finding tenants and keeping up with maintenance often requires more effort than many retirees have in mind.
Real estate is the oldest asset class in the book -- it's timeless.
Shares of Realty Income (NYSE:O) eked out a 1.90% gain over the past month, outperforming the market over the same time as the S&P 500 lost 5.25%.
Realty Income Corp. (O) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
The recent market sell-off and prevailing negative sentiment offer a chance to buy stocks at reasonable valuations. Strong business fundamentals post-merger and proven ability to navigate higher financing cost and macroeconomic headwinds position the company for future growth. The company is valued using a robust DCF model, anchored in historical performance, management guidance and a conservative outlook.
In the most recent trading session, Realty Income Corp. (O) closed at $58.52, indicating a +0.97% shift from the previous trading day.
Realty Income owns 15,621 properties across 89 industries and 7 countries, minimizing concentration risk and enhancing diversification. 91% of retail rent comes from service-based, low-price-point, non-discretionary tenants, ensuring stability during economic downturns. 82.3% of leases include rent escalation clauses; the average lease term is 9.3 years with 98.7% occupancy.
The underlying dynamics of this fast-evolving market are really hard to pin down.
I recently bought a few more shares of Realty Income (O -0.46%). I've been steadily adding to my position in the real estate investment trust (REIT) over the past couple of years by taking advantage of market dips to purchase more shares.
The latest trading day saw Realty Income Corp. (O) settling at $57.27, representing a +0.46% change from its previous close.
Rating Justification: Downgrade Realty Income Corporation to hold due to increased U.S. 10-year Treasury rates impacting debt and equity financing costs, narrowing investment spreads. Macro Spread: The spread between the Nareit Free Standing Retail implied cap rate and U.S. 10-year Treasury yield is below the historic spread, which is a headwind for the sector. Investment Spread: Realty Income's current investment spread of 43 basis points is too narrow, indicating insufficient economic profit from potential acquisitions.
Realty Income Corporation has shown incredible resilience amidst market volatility, outperforming the S&P 500 and its real estate peers recently. The company's high average tenancy rates and non-discretionary retail clients help mitigate cyclical risks, assuring investors of its defensive profile. Despite higher financing costs and slower growth outlook, O's solid financial footing and attractive dividend yield of nearly 6% are highly appealing for income investors.