High-Yield Realty Income Is a Buy if You Love Reliable Dividend Stocks

Core Viewpoint - Realty Income is a strong candidate for reliable dividend stocks due to its high yield and robust business fundamentals [1][5]. Group 1: Dividend Yield and History - The average yield of the S&P 500 index is 1.3%, while the average REIT offers a yield of 4.1%, and Realty Income provides a compelling 5.8% yield [1]. - Realty Income has a remarkable track record of increasing its dividend for 30 consecutive years, with quarterly increases for 110 quarters [4]. Group 2: Financial Stability - Realty Income's balance sheet is rated investment grade, and its adjusted funds from operations (FFO) payout ratio was a solid 75% in Q1 2025, indicating a strong financial foundation for its high yield [5]. Group 3: Business Model and Portfolio - Realty Income operates as a net lease REIT, owning over 15,600 properties where tenants are responsible for most operating costs, which reduces risk across its large portfolio [7]. - Approximately 75% of Realty Income's rents come from retail assets, which, despite economic uncertainties, have shown resilience with occupancy rates never falling below 96% during the Great Recession [8]. Group 4: Growth and Diversification - Realty Income's size, nearly four times larger than its closest competitor, provides advantageous access to capital markets and opportunities for diversification, including investments in casinos, data centers, and European properties [9]. Group 5: Investment Characteristics - Realty Income is characterized by slow and steady dividend increases, typically in the low- to mid-single-digit range, making it a foundational investment for long-term dividend investors [10].