Realty Income(O) The Motley Fool·2025-03-14 10:33Core Viewpoint - Realty Income is committed to providing a reliable and increasing monthly dividend to its investors, having successfully done so for over three decades since going public in 1994, with its 130th dividend increase recently declared [1][4]. Dividend Performance - The latest monthly dividend payment is 3.222, reflecting a modest 0.2% increase from the previous month, following a 1.5% increase last month and a 4.5% increase over the past year [3][4]. - Realty Income has maintained a consistent dividend increase every year for 30 years, achieving a compound annual growth rate of 4.3% in dividends over this period [4]. Business Model and Strategy - The REIT's business model is built on generating consistent cash flow, even during market volatility, which supports its ability to deliver increasing monthly dividends [5]. - Realty Income focuses on owning properties secured by net leases, which provide stable income as tenants cover all operating costs [6]. - The company aims to be a real estate partner to leading global companies, enhancing its investment opportunities as these partners grow [7][8]. Financial Strength - Realty Income has a conservative dividend payout ratio of less than 75% of its adjusted funds from operations (FFO), allowing for significant excess free cash flow to reinvest into new income-generating real estate, totaling nearly $920 million last year [9]. - The REIT boasts an elite balance sheet, being one of only eight REITs with bond ratings of A3/A- or better, which provides access to low-cost debt financing [10]. Investment Outlook - Realty Income has a strong track record of increasing dividends, making it an attractive option for investors seeking a durable and steadily rising income stream [12].